Agricultural and Food Sector 2012

LITHUANIAN INSTITUTE OF AGRARIAN ECONOMICS
AGRICULTURAL AND FOOD

SECTOR IN LITHUANIA

2012

VILNIUS, 2013

An analytical review of the Lithuanian agricultural and food sector over the period of 20082012.
Agricultural and Food Sector in Lithuania 2012 is intended for representatives of governmental
and self-governing authorities, scientific research and study institutions, and all interested in the
development of agricultural and food sector, fisheries and rural areas.

General Editor Dr. Rasa Melnikien
Scientific Editor Dr. Nijol Pelanien
Reviewer Prof. Dr. Neringa Stoniuvien

ABBREVIATIONS

AB J oint Stock Company
AIRBC Agricultural Information and Rural Business Centre
AFMIS Agricultural and Food Market Information System
AWU annual working unit
CAP Common Agricultural Policy
CN combined nomenclature
CNDP complementary national direct payment
EAGF European Agricultural Guarantee Fund
EC European Commission
EU European Union
EU-12 Member States since 2004 and 2007
EU-15 the old EU Member States
EU-27 all EU Member States in 2007
FADN Farm Accountancy Data Network
GVA gross value added
LIAE Lithuanian Institute of Agrarian Economics
LTL Lithuanian Litas
MRM market regulatory measures
RDP Rural Development Programme
SME small/medium-sized enterprise
UAA utilized agricultural area
WTO World Trade Organisation

ISBN 978-9955-481-39-3
Quoting requires reference to the source and website address.
Lithuanian Institute of Agrarian Economics, 2013

TABLE OF CONTENTS
FOREWORD .
4
I. ACHIEVEMENTS OF LITHUANIAN AGRARIAN SECTOR AND
KEY FACTORS INFLUENCING THEM ...................................... 5
1. Importance of agricultural and food sector in the national economy.
Rasa Melnikien....................... 5
2. Gross agricultural output. Irena Kriiukaitien, Virginia Namiotko .... 14
3. EU and national support for the development of Lithuanias agricultural
and food sector. Artiom Volkov ..............................................................
19
4. Economic entities in agriculture and food industry. Aldona Stalgien .. 30
II. PRODUCTION OF AGRICULTURAL AND FOOD PRODUCTS AND
SALES IN THE DOMESTIC AND FOREIGN MARKETS 43
1. Changes in trade of agricultural and food products in the domestic
market. Albertas Gapys ................................ 43
2. Foreign trade in agricultural and food products. Tamara Petuchova,
Audron Laskauskien 46
3. Changes in production of agricultural and food products ... 62
3.1. Cereals. Albertas Gapys .......................... 62
3.2. Milk. Deiva Mikelionyt ...................... 69
3.3. Meat. Albertas Gapys ..................... 79
3.4. Rape. Albertas Gapys ......... 88
SUMMARY .. 93

FOREWORD

The publication Agricultural and Food Sector in Lithuania 2012 is the
fourteenth edition of the annual publications by the Lithuanian Institute of Agrarian
Economics (LIAE). This analytical economic survey of agriculture, processing industry
and fisheries was prepared referring to the statistical information, the census of
agriculture, accountability data of companies, and the findings of research conducted by
the LIAE staff.
The year 2012 was one of the most successful for the Lithuanian agricultural and
food sector within the entire period under analysis. Due to good climatic conditions, the
volumes of manufacture of a major part of agricultural products, especially grain,
increased, and purchase prices went up. The gross agricultural output, if calculated at
comparable prices, increased by 13.8 percentage points as compared to 2011. In 2012
the Lithuanian agricultural and food sector increased export even by 26.9%. Balance of
foreign trade in agricultural and food products has been positive since 2004. In 2012 it
was by LTL 1391 million higher than in 2011 and amounted to LTL 3388 million.
National agricultural development was encouraged by the European Union (EU) and
national budget support. In 2012 the share of the funds in the Lithuanian budget,
assigned for financing of direct and investment assistance in agriculture, intervention
and other market regulation measures, amounted to LTL 2.79 billion.
The publication presents changes in the indicators of the agricultural and food
sector development covering the five-year period and focusing more considerable
attention on the events and outcomes in 2012. With an aim of retaining the possibility
for comparing the key tendencies, data in all surveys is provided following the single
methodology and structure.
As in any previous year, some preliminary statistical indicators for the year 2012
were used. Final economic and financial outcomes will be reflected in the later
publications of the Department of Statistics and in the next-year LIAE survey.
Insignificant deviations due to rounding are possible in statistical data.
The publication is intended for all who are interested in the achievements and
problems of the agrarian and food sector. Material provided here might be useful for
agricultural specialists and scientists, farmers and entrepreneurs, teachers and students.
Our sincere gratitude goes to the Heads of the Department of Statistics and the
Ministry of Agriculture of the Republic of Lithuania, the Agricultural Information and
Rural Business Centre and their staff members for provided statistical information and
advice. Dear readers, we are kindly looking forward to your remarks and proposals.

Dr. Rasa Melnikien,
Director of the Lithuanian Institute of Agrarian Economics

Achi evement s of Li t huani an Agrari an Sect or
and Key Fact ors i nf l uenci ng t hem

5

I. ACHIEVEMENTS OF LITHUANIAN AGRARIAN
SECTOR AND KEY FACTORS INFLUENCING THEM

1. Importance of agricultural and food sector in the national
economy

Agriculture and industry processing its products is not just the important source
of economic welfare supplying the population of the country with qualitative food and
certain energy resources. This sector has a big impact on the development of rural areas
that are inhabited by one-third of Lithuanias population. Even though the rapid
structural changes took place in Lithuanias economy within the past years the
contribution of the sector of industry and services to the gross domestic product
increased at a rapid pace; agriculture, however, is still one of the most important sectors
of export; it also generates income for almost one-tenth of the employed people in the
country.

Gross value added in the agricultural and food, beverages and tobacco
production sector. Increase in the volumes of production was characteristic of
Lithuanias economy in 2012. It showed that business was able to cope with the
outcomes of the 20082009 crises. The gross domestic product, if estimated at current
prices, in 2012, as compared to 2011, increased by 3.7% and exceeded the pre-crisis
level. The value added generated in agriculture, forestry and fisheries reached LTL 4.0
billion, and as compared to 2011 increased even by one-fifth, reaching its peak within
the period of 20082012 (Table 1.1). The growth of the gross value added (GVA)
created in agriculture and related services was conditioned by a record grain harvest of
4.7 million tonnes in 2012, that was even by 36% more than in 2008. With the increase
of grain supply, its purchase prices remained high 708 LTL/t. In 2012 grain purchase
prices were highest within the period of 20082012.
Procurement of vegetables in 2012 equalled the volumes of that as in 2008 and
accounted for 55.6 thou. t. Purchase prices, however, were one of the lowest within the
period of 20082012 exceeded only those during the 2009 crisis: the average price for
vegetables reached 1065 LTL/t. The purchased volumes and prices for livestock
products in 2012 stayed at the 2008 level and did not have any impact on the growth of
the value added either.
Estimating the structural changes in Lithuanias economy since the re-
establishment of independence, at the rapid growth of the sectors of industry and
services a tendency of the declining contribution of agriculture into the GVA was
noticed within several years. In Lithuania, prior to 2011, a tendency of consistent
decrease of the agricultural contribution into the added value of the country also
prevailed. In 2008 the share of GVA created in Lithuanias agriculture, forestry and
fisheries accounted for 3.6%, and in 2011 3.5%. The increased volumes of production
in 2012 predetermined that the share of GVA created in Lithuanias agriculture, forestry
and fisheries, as compared to 2011, increased and came to 3.9%.

6

Table 1.1. Macroeconomic indicators of agriculture, forestry and fisheries
in 20082012
Indicators 2008 2009 2010 2011* 2012**
Gross domestic product, at current prices,
LTL mill.
111 920,1 92 032,4 95 323,2 106 369,9 113 471,5
Gross value added, at current prices, LTL
mill.
100 342,0 82 910,3 85 561,7 95 543,0 102 414,6
Changes in the gross value added,
at constant prices of 2005, %
121,8 103,5 105,3 111,5 115,7
Gross value added created in agriculture,
forestry and fisheries, LTL mill.
3 665,2 2 318,1 2 815,4 3 350,2 4 025,6
Share of agriculture, forestry and fisheries in
gross value added, %
3,6 2,8 3,3 3,5 3,9
Gross value added created in manufacture of
food products, beverages and tobacco
products, LTL mill.
3 429,0 3 727,2 3 878,1 4 445,3 4 885,3
Share of manufacture of food products,
beverages and tobacco products in gross
value added, %
3,4 4,5 4,5 4,7 4,8
* Provisional data.
** Preliminary data.
Source: Data of Statistics Lithuania.

Currently, the share of value added created in Lithuanias agriculture, forestry
and fisheries remains substantially higher than in the old EU countries (Fig. 1.1.).
In 2011 the smallest share of GVA generated by agriculture, forestry and
fisheries was in Luxembourg (0.3%), the United Kingdom and Belgium (0.7%),
Germany (0.9%). Among the new EU countries, however, the share of GVA created in
agriculture, forestry and fisheries in Lithuania in 2011 was lower than in Romania
(7.5%), Bulgaria (5.4%), Latvia (5.1%), Hungary (4.5%), Poland (4.0%), and Estonia
(3.6%).
The growth of volumes in food, beverages and tobacco production shows the
post-crisis recovery of this sector. The gross production generated by this sector in 2008
amounted to LTL 12 billion, and in 2012 already LTL 14 billion, i.e. increased by
18.0%. GVA also went on increasing; in 2012 it reached LTL 4,885.3 million and, if
calculated at comparable prices, was by 6.5% higher than in the previous year. GVA
created in this sector within the period of five years since 2008 has increased by 20.6%.
Due to the more rapid growth of added value than the average rate of countrys added
value, a contribution of food, beverages and tobacco production into the creation of
GVA also increased and in 2012 it was 4.8%.

7
1,7
1,5
2,8
3,7
3,1
4,1
2,3
2,5
2,3
2,4
1,8
1,7
1,7
1,5
0,7
0,6
0,4
1,7
1,5
7,5
5,4
4,5
3,6
3,5
3,4
3,4
2,9
2,5
2,3
2,2
1,9
1,8
1,6
1,6
1,5
1,4
0,9
0,7
0,7
0,3
2,0
3,0
7,4
7,2
2,3
1,6
1,0
1,0
4,0
3,7
2,7
2,0
5,1
2,3
4,0
2,6
0 1 2 3 4 5 6 7 8
EU-27
EU-15
Romania
Bulgaria
Latvia
Hungary
Poland
Estonia
Lithuania
Greece
Slovakia
Finland
Slovenia
Spain
Czech Republic
Cyprus
Portugal
Italy
France
Sweden
Netherlands
Austria
Malta
Denmark
Germany
Belgium
United Kingdom
Luxembourg
2011
2008

Fig. 1.1. The share of gross value added created in agriculture, forestry and
fisheries in the total countrys value added in Lithuania and other EU countries
in 2008 and 2011, per cent
Source: Data of Eurostat.

8

Most important foreign trade tendencies. Considerable growth of production
volumes in food, beverages and tobacco production and in agriculture, forestry and
fisheries sectors predetermined the increased growth rates in foreign trade. Estimating
export and import variation tendencies of agricultural and food products, it is possible to
state that foreign trade volumes in this sector were less impacted by the crisis than
foreign trade indicators of other branches of the economy. Even though the export
volumes of Lithuanias economy dropped by 27% in 2009, agricultural and food
production also could not avoid the slumping tendencies, export of these products,
however, suffered less than in other sectors. Due to this reason, the share of export in
agricultural and food products increased to 19.6% (Table 1.2). Moreover, it should be
noted that in 2009 the export value of agricultural and food products decreased due to
the dropped prices in foreign markets, though volumes of exported products were higher
as compared to 2008, e.g., export of cheeses and curd was by 1.2% higher, whereas
income raised was by 17% lower, grain export was by 11% higher and income
generated was lower by 23%.
Even with the recovery of export in other sectors, a contribution of agricultural
and food production into the export of the country remained significant. In 2010 it
comprised 18.0%, in 2011 16.6%; in 2012 18.4%. In terms of value in 2012, as
compared to 2008, export increased even by 27%. Crop growers made a notable
contribution to export growth rates yielding as mentioned a record harvest in 2012.
Export of rape grown in Lithuania increased twice. Value of other exported products,
however, increased slower: dairy products by 15%, meat and edible meat offal by 8.7%.

Table 1.2. Export, import and foreign trade balance of agricultural and food
products in 20082012
Indicators 2008 2009 2010 2011 2012
Value of exported products, LTL mill. 8893,5 7979,4 9710,3 11529,8 14631,8
share in total export, % 16,0 19,6 18,0 16,6 18,4
Value of imported products, LTL mill. 8139,8 6650,2 7977,6 9580,2 11244,1
share in total import, % 11,2 14,7 13,1 12,2 13,0
Foreign trade balance, LTL mill. 753,7 1329,3 1732,7 1949,6 3387,7

Estimating changes occurring in the export structure of agricultural and food
products in 2012, four most important tendencies may be distinguished:
Share of export in products of Lithuanian origin against the total export in
agricultural and food products is decreasing constantly. Re-export during all
the years, except 2009, increased more rapidly than export in agricultural and
food products of Lithuanian origin. Value of exported products went up due
to the growth in the value of products of Lithuanian and non-Lithuanian
origin, whereas the value of export in non-Lithuanian origin products which
is based on import of agricultural and food products manufactured in other
countries increased more rapidly than of products manufactured in Lithuania.


9

In 2012 export of the latter as compared to 2011 increased by 1.25 times, re-
export by 1.31 times. Within the period of 20082012, export of products of
Lithuanian origin went up by 1.6 times, and re-export by 1.8 times. In 2012
products of Lithuanian origin accounted for 66% of the total export in
agricultural and food products.
Changes in the agricultural production structure had an impact on the change
in the export structure of the products of Lithuanian origin. Within the
reference period since the re-establishment of independence, milk and dairy
products have been and are the most important agricultural and food export
commodity of Lithuania. Already in 2006, however, an important place by
export value belonged to grain (grain of Lithuanian origin accounted for 7.2%
in the export structure). With livestock number and demand for feed grains
decreasing on the domestic market, the share of grain export has increased
within the entire reference period. In 2004 milk and its products comprised
30% of the total export of agricultural and food products of Lithuanian origin,
grain 9.2%, in 2008 milk 22%, grain 18%, and in 2012, correspondingly, 19%
and 18%. An increase in rape crop areas involved an increase in rape export.
Oilseeds, straw and feed in 2012 comprised 7.4% of export of products of
Lithuanian origin. These tendencies make it possible to state that traditional
specialization of the country undergoes changes.
Share of raw products in the export structure of Lithuania has been
increasing. Even though grain and rape export is profitable for farmers and
exporters, but while selling grain in foreign markets Lithuania exports raw
materials, i.e. products giving the lowest value added. Export of other raw
products is also increasing amount of exported raw milk as compared to
2008 increased by 22 times, that of meat and edible meat offal by 1.4 times.
Lithuania has retained the most important export markets of agricultural and
food products and expanded its export geography. In 2012 Russia remained
the major partner in the export of agricultural and food products. Export to
this country accounted even for 30% of the total value of export in
agricultural and food products, and during the year it increased even by 27%.
The second partner is Latvia export to this country within the same period
has increased by 17%, and its share in the export structure reached 12%. The
third partner as to export importance was Germany, and the amount of
products shipped into it was by 9.3% higher than in 2011 (for LTL 1293.8
million), and export share to this country constituted 8.8%. It should be
underscored that export geography has been further expanded: export to Saudi
Arabia increased by 42%, export to Iran has been started. In 2011 Lithuania
exported agricultural and food products into 127 countries, and in 2012 into
131 countries.
In 2012 growth tendencies in imports of agricultural and food products have
strengthened still more. In 2012 in comparison with 2011 import increased by 17%.
Growth in imports of agricultural and food products was encouraged by the opportunity
for re-exporting of some imported products into the neighbouring markets due to the
improved economic situation in those countries. In 2012 Lithuania imported 39 thou. t
of frozen fish, of which 23% was re-exported, 29 thou. t of fish fillet (18% was re-
exported). Re-export of fruit and nuts made the major share.

10

Other strong reasons for import enhancement are related to the need of meat and
milk processing companies to be supplied with the raw materials. Since the beginning of
2008 pork import volumes have been decreasing though still remained quite
considerable in comparison with the production volumes in Lithuania. In 2012,
according to preliminary LIAE data, 74.2 thou. t of pork (carcass weight) was produced,
and 61 thou. t was imported. Beef production amounted to 40 thou. t, beef imports to
1.3 thou. t, but 25 thou. t of beef of Lithuanian origin was exported. Export and import
volumes of poultry meat are almost the same, whereas the average price of imported
poultry meat is by 31% lower than that of exported poultry meat. Negative tendencies
have become further revealed on the milk market when due to the low milk purchase
prices on the Lithuanian market the farmers seek for raw milk sale alternatives, whereas
milk processors at the same time are increasing the volumes of raw milk import. Since
2005, after the import of milk for processing has started, import of raw milk until 2012
increased by 9.6 times (from 39 to 381 thou. t), and its average price by 11% (from 950
to 1055 LTL/t). In 2012, 69% of raw milk was imported from Latvia, 31% from
Estonia. Raw milk export has increased rapidly within the recent years while milk
processors were importing raw milk: in 2009, 10.4 thou. t of raw milk was exported, in
2010 23.6 thou. t, in 2011 70.7 thou. t, in 2012 78.8 thou. t. The most important
export markets are the neighbouring countries: in 2012, 90% of milk was exported to
Poland and 9.4% to Latvia.
Import of raw materials shows that food, beverages and tobacco production
capacities exceed the supply of raw materials manufactured by Lithuanian agriculture
and owing to the developed disproportions the food, beverages and tobacco industry is
becoming still more dependent on the volumes and quality of imported raw materials.

Employment, labour efficiency. Agriculture in Lithuania has still retained its
position as an important employer for the countrys population. Changes on the labour
market reveal that employment structure gradually is getting closer to the employment
structure characteristic of post-industrial countries; the importance of this sector on the
labour market, however, is still significant. Even though throughout the period of 2008
2012 the share of employed persons in agriculture, forestry and fisheries decreased by
1.0 percentage point to 8.9% against the total number of the countrys workforce;
nevertheless, it still exceeds strongly the corresponding indicator in many EU states. In
2012 in the EU-27 countries the share of employed persons in agriculture, forestry and
fisheries accounted for 4.9%, and in the EU-15 3.0% of the total number of the
employed in the country.
In assessing the employment situation by long-term tendencies in Lithuanias
economic development, it should be stated that decline in the number of workforce due
to the population emigration has not left agriculture aside. In 2012 the number of the
employed in the national economy comprised 1278.5 thousand, and, as compared to
2008, their number dropped by 241.5 thousand, or 15.9%. The number of the employed
in agriculture, forestry and fisheries went on reducing slower correspondingly by
5.2 thousand and 6.2%. Tendencies for rapid changes in the employment in agriculture
that have formed since the beginning of Lithuanias membership in the EU got stabilized
in 2008 and in 2012, if compared to 2011, the number of those employed in agriculture,
forestry and fisheries even augmented from 108.7 to 113.6 thousand. Economic crisis
somewhat stopped the reduction of employment in agriculture, since part of the working

11
age rural population that got employed in the construction, services and industrial
sectors at the economic boom after losing their jobs due to crisis came back to farming.
The stabilized slumping tendencies of employment in agriculture stopped labour
efficiency growth in this sector, even though value added per annual working unit
(AWU) created within the entire reference period in agriculture, forestry and fisheries
fluctuated greatly: in 2008 LTL 30.7 thousand, in 2009 LTL 17.8 thousand, in 2010
LTL 23.2 thousand, in 2011 LTL 28.8 thousand, in 2012 LTL 31.2 thousand and, as
compared to 2011, labour efficiency increased by 11.8%, and, as compared to 2008,
remained at almost the same level.
Even though labour efficiency in agriculture, forestry and fisheries is increasing,
it still remains considerably lower than the average in the country, and this difference is
increasing. In 2008 labour efficiency in agriculture, forestry and fisheries was lowest
among the sectors and made just 46% of the average labour efficiency in the national
economy. In 2012 this ratio decreased still more and reached 40%.
The lower labour efficiency in agriculture in comparison with other branches of
economy is predetermined by the dependence of technological processes on natural
factors. For example, added value created in agriculture, forestry and fisheries in 2011
per employed person in such old EU countries of the strong economy and successfully
developed agriculture like Denmark and Germany constituted accordingly 58% and
59% of the average national labour efficiency. By labour efficiency level in agriculture
Sweden and the Netherlands are to be distinguished from the EU states where value
added per AWU created in this sector accounted correspondingly for 84% and 69% of
the average national labour efficiency.
Comparing the labour efficiency indicators in Lithuania with analogous
indicators in other EU countries, it is seen that labour efficiency in our countrys
agriculture is quite considerably lagging behind other EU countries (Fig. 1.2).


12

50,3
32,9
48,6
38,9
26,7
30,5
35,6
26,7
24,4
13
18,3
12,8
13,7
6,2
9,2
8,4
5,1
4,3
4,5
19,3
31,2
106,1
58,4
56,5
49,4
43,2
40,5
37,4
35,6
35,2
35,2
30,6
27,3
24,6
19,9
15,1
11,3
10,7
8,8
6,8
6,2
5,5
4,4
7,0
32,0
77,0
28,0
16,6
36,4
24,7
8,6
33,1
15,0
17,9
9,1
40,3
0 20 40 60 80 100 120
EU-27
EU-15
Sweden
Finland
Denmark
Netherlands
France
Germany
Belgium
Slovakia
Austria
Luxembourg
United Kingdom
Czech Republic
Spain
Italy
Estonia
Malta
Greece
Cyprus
Latvia
Slovenia
Portugal
Hungary
Lithuania
Poland
Romania
Bulgaria 2011
2008

Fig. 1.2. Value added per annual working unit in national economy and in
agriculture, forestry and fisheries in Lithuania and other EU countries
in 2008 and 2011, LTL thousand


13
As seen, other countries are able to better use the factors for value added
increase in agriculture. Lithuania gains no advantage even when the value of
production-related subsidies is included in calculating the GVA. The data of the
Eurostat economic accounts for agriculture show that subsidies for production in the
GVA created in agriculture and related activities accounted for 23.1% in 2008, 26.8% in
2009, 19.8% in 2010, 22.8% in 2011, and 17.3% in 2012. By size of the share of
production-related subsidies Lithuania in 2008 was among the leading after Finland and
Slovakia, and it reduced this indicator least of all. Share of the added value for
production-related payments in EU-15 dropped in the period of 20082012 by
2.5 percentage points and in EU-12 by 5.5 percentage points.

Table 1.3. The share of subsidies on products in the gross value added
in agricultural industry in some EU countries in 20082012, per cent
Country 2008 2009 2010 2011 2012
Finland 32,7 22,6 21,9 19,6 18,8
Lithuania 23,1 26,8 22,8 19,8 17,3
Portugal 8,3 9,8 10,0 12,8 10,0
Poland 14,5 18,4 16,2 11,6 5,9
Bulgaria 4,0 7,5 5,8 5,4 4,3
Belgium 5,4 7,1 4,6 5,2 4,2
Greece 6,1 5,7 3,9 3,6 4,0
Hungary 2,6 3,5 3,5 3,3 4,0
France 9,6 11,0 4,4 3,9 3,5
Austria 3,7 4,8 4,1 3,4 3,4
Malta 17,0 7,8 5,8 3,1 2,7
Latvia 14,7 22,5 5,7 3,1 2,7
Slovenia 2,8 2,8 2,6 2,3 2,6
Spain 7,0 8,1 3,2 3,0 2,4
Sweden 5,0 6,9 4,6 4,7 2,3
Czech Republic 7,9 11,1 5,1 3,8 1,9
Ireland 2,2 3,6 2,3 1,7 1,6
Denmark 1,9 2,0 1,3 1,2 0,5
Italy 1,6 2,2 1,7 1,2 1,2
Estonia 7,5 5,8 1,9 1,2 1,1
Netherlands 2,0 2,7 1,2 0,8 0,6
Slovakia 28,6 21,6 17,1 9,2 0,3
United Kingdom 0,8 0,5 0,4 0,3 0,3
Romania 6,0 6,4 0,9 0,0 0,0

In Lithuania from the beginning of the EU membership the most important
factor in the increase of labour efficiency has become the development and
modernization of machinery and equipment. Crop-growing farms after acquisition of
modern machinery and expansion of the arable land areas by way of ownership or lease
could apply powerful technology and use the advantages of scale economies. Labour
efficiency was increasing with agricultural employment reduction, though no due
attention was paid to increase the added value. Tendencies for change in labour

14
efficiency within 20082012 show that other labour efficiency enhancement factors
should be also used, focusing special attention on certain areas enabling the increase of
added value in small and medium-sized farms and its redistribution among the food
supply chain participants to the benefit of farmers.
With a view to increasing added value created in agriculture, account should be
taken of the fact that support measures are not enough for farmers at the stage of
production. Farmers are still more interested in the support for other parts in the added
value creation chain. This is especially important for small and medium-sized farms.
Lately, consumers devote still more attention to food quality and want to eat ecological
and fresh food, produced at their place of residence. Therefore, the present situation is
especially favourable for the farmers attempts to sell agricultural products directly to
the final consumer. The support measures should be based on the idea to stimulate
farmers to sell as bigger part of their products as possible to the final consumer rather
than to the processors of the raw materials or other agents.

2. Gross agricultural output

According to the preliminary data of the Department of Statistics, the gross
agricultural output in 2012, if calculated at current prices, was produced for LTL 9.43
billion, i.e. by 16.0% more than in 2011. This was predetermined by the better yield of
agricultural products. Within the entire period under analysis, the crop output comprised
the major part of the gross agricultural output value as compared to livestock output.
This was conditioned by the more favourable price ratio between the crop output and
raw materials necessary for its production, as compared to livestock output, as well as
bigger support for this branch. The share of crop output in the agricultural production in
2012, as compared to 2011, increased by 5.2 percentage points (Table 1.4).

Table 1.4. Structure of gross agricultural output* in 20082012
Output
2008 2009 2010 2011 2012**
LTL mill. % LTL mill. % LTL mill. % LTL mill. % LTL mill. %
Total 7340,0 100 5707,0 100 6388,2 100 8128,0 100 9426,7 100
crop output 4125,5 56,2 3239,5 56,8 3476,2 54,4 4825,1 59,4 6093,7 62,4
animal output 3214,5 43,8 2467,5 43,2 2912,0 45,6 3302,9 40,6 3333,0 37,6
* At current prices.
** Preliminary data.

The growth of the gross agricultural output if estimated at comparable prices
was somewhat lower (15.0%). It is worthwhile to note that throughout the entire period
of 20082012 changes in crop and livestock output volumes as compared to the
previous years vary (Fig. 1.3). In 2010 crop output decreased most of all by 17.4%. Its
highest increase was in the year 2012. The volume of livestock output decreased most
considerably in 2009 by 6.1%, and increased most of all in 2012 by 3.0%. The
volume of livestock output in 2012, as compared to 2011, increased by 2.2%.

15
-8,6
8,0
15,0
5,2
1,3
7,1
-17,4
15,5
23,7
8,9
2,2
3,0
-1,0
-6,1
0,2
-30
-20
-10
0
10
20
30
2008 2009 2010 2011 2012*
Total Crop output Animal output
*
* Preliminary data.
Fig. 1.3. Changes in gross agricultural output in 20082012
(compared to the previous year), per cent

The value of crop output in 2012, as compared to 2011, was considerably higher.
This was conditioned by the higher yield of: grain 43.4% (due to 8.3% larger
harvested area and 32.2% higher yielding capacity), rape 30.7% (4.2% and 25.3%,
respectively), sugar-beets 14.3% (9.1% and 5.0%). Higher purchase prices of the said
products also contributed to the increase of the crop output value. Rapeseed and cereal
purchase prices were higher accordingly by 8.2% and 7.9%, sugar-beets by 4.3%.
Gyvulininkysts produkcijos vert 2012 metais, palyginti su 2011-aisiais,
padidjo 0.9 proc. Tai lm padidjusi kai kuri gyvulininkysts produkt gamyba ir
supirkimo kainos. Kiauini, kiauli, galvij ir pauki supirkimo kainos iaugo
atitinkamai 36,9 proc., 12,9 proc., 7,8 proc. ir 2,4 proc.
The value of livestock output in 2012, as compared to 2011, increased by 0.9%.
This was owing to the increased production of some livestock products and purchase
prices. Purchase prices of eggs, pigs, cattle and poultry increased by 36.9%, 12.9%,
7.8% and 2.4%, respectively.
The major part in the gross agricultural output structure in Lithuania in 2008 and
2012 belonged to cereals (19.7 and 32.2%, respectively) and milk (24.4 and 18.3%)
(Fig. 1.4).

16
Milk
24,4%
Poultry
5,3%
Pigs
10,0
Cattle
5,7%
Fodder
& other crops
13,1%
Orchards & berry
plantations
Vegetables
4,8%
Potatoes
6,7%
Industrial crops
5,1%
Cereal
19,7%
Other animal
output
1,4%
Eggs
2,8%
2008

Milk
18,3%
Poultry
4,6%
Pigs
6,1%
Cattle
4,4%
Fodder &
other crops
11,4%
Orchards&
berry plantations
0,3%
Vegetables
3,7%
Potatoes
2,1%
Industrial crops
12,7%
Cereal
32,2%
Other animal
output
1,8%
Eggs
2,6%
2012*
* Preliminary data.
Fig. 1.4. Structure of gross agricultural production in 2008 and 2012

In 2012, as compared to 2008, the share of cereals and crops for processing
increased most of all in the gross agricultural output structure (by 12.5 and
7.6 percentage points, respectively), whereas the share of milk, potatoes and pigs
decreased most considerably (by 6.1, 4.6 and 3.9 percentage points, respectively). The

17
main reasons for negative tendencies in the milk sector are low purchase prices for milk
and relatively lower direct payments as compared to crop products.
The gross agricultural output structure in separate EU countries varies. All EU
countries as to the gross agricultural output structure may be divided into three groups.
The first group includes the countries where livestock production is prevailing (e.g.,
Ireland, Denmark), the second group countries where the share of livestock and crop
output is almost equal (e.g., Slovakia, Slovenia), the third group countries where crop
output is prevailing (e.g., Romania, Greece). Lithuania is listed in the third group. In 2012
crop output in Lithuania constituted the portion similar to that as in the Czech Republic,
Latvia or France (Table 1.5).

Table 1.5. Structure of gross agricultural output in EU countries in 2008 and 2012
Country
2008 2012*
crop
output, %
animal
output,
%
gross
agricultural
output,
LTL/ha UAA
crop
output, %
animal
output,%
gross
agricultural
output,
LTL/ha UAA
Ireland
28,3 71,7 4246 27,2 72,8 4799
Denmark
37,3 62,7 11796 36,9 63,1 14290
Finland
38,5 61,5 5592 40,9 59,1 6602
Malta
39,7 60,3 40470 40,5 59,5 37243
Estonia
42,2 57,8 2243 49,0 51,0 3029
United Kingdom
43,4 56,6 5303 40,5 59,5 6219
Belgium
43,5 56,5 18944 46,0 54,0 21706
Sweden
45,7 54,3 5367 53,0 47,0 6162
Luxembourg
45,9 54,1 9223 51,8 48,2 9832
Austria
46,0 54,0 7314 49,0 51,0 8278
Cyprus
50,6 49,4 17632 50,6 49,4 20133
Slovakia
51,6 48,4 4095 56,2 43,8 3732
Slovenia
51,9 48,1 8418 52,9 47,1 8668
Germany
52,3 47,7 10318 51,5 48,5 11485
Netherlands
53,9 46,1 44096 55,1 44,9 47962
Czech Republic
54,4 45,6 4671 61,0 39,0 4688
Poland
54,4 45,6 5178 54,0 46,0 5506
Portugal
56,0 44,0 5959 53,7 46,3 5864
Lithuania
56,2 43,8 2755 64,6 35,4 3394
Latvia 56,7 43,3 1841 62,7 37,3 2360
France 59,6 40,4 8266 62,7 37,3 9187
Italy 63,4 36,6 12365 60,3 39,7 12621
Bulgaria 64,4 35,6 3200 68,4 31,6 3186
Hungary 64,5 35,5 5642 62,0 38,0 5454
Spain 64,5 35,5 5866 60,6 39,4 6097
Greece 71,6 28,4 10138 71,7 28,3 10092
Romania 74,5 25,5 4380 68,9 31,1 3464
* Preliminary data.


18
In 2012 the highest gross agricultural output per 1 ha UAA was in the
Netherlands, Malta, Belgium and Cyprus. These countries utilized rationally their
natural and industrial resources, selected priorities according to their competitive
advantages and situation on the market. In 2012 Lithuanias gross agricultural output
per 1 ha UAA was one of the lowest in the EU. Compared to Poland, this indicator was
almost by half lower, and to Denmark where conditions are similar even by 4 times.
After making a deeper analysis it could be seen that this was due to purchase prices for
agricultural products which are lower than in other countries and support.
As seen from the data provided, no distinct variation exists between separate
groups. For gross agricultural output per 1 ha UAA, both crop-growing and livestock-
breeding is of the same importance. For example, in Ireland where livestock output
constitutes almost three fourths of the gross agricultural output, the gross agricultural
output per 1 ha UAA is nearly the same as in the Czech Republic where livestock output
accounts for 39.0% of the gross agricultural output. In 2012 in Lithuania the gross
agricultural output per 1 ha UAA was somewhat higher than in Estonia where more than
a half of the gross agricultural output consists of livestock output.
Procurement volumes and prices for agricultural products as well as prices of
material resources necessary for their production have the strongest impact on the volumes
of the gross agricultural output. The volume and structural changes of the agricultural
production in Lithuania were also determined by the ever changing market conditions.
Volumes of purchased agricultural products during the period of 20082012 varied
unevenly. In 2012, in comparison with 2011, procurement of grain increased by 86.2%,
rapeseed by 47.2%, fruit and berries by 21.4%, vegetables by 17.3%, potatoes by 15.7%.
Procurement volumes of animals and livestock products as compared to crop-growing
products increased at a slower pace. Purchased animals and poultry (live weight) increased
by 4.5% and milk by 3.2%. These changes were much influenced by the prices of
agricultural products and material resources required for their production.
Tendencies of price index variation for agricultural products and resources
required for their production within the period of 20082012 slightly differed. The
highest price index on crop and livestock products as well as on inputs was in 2011 and
lowest in 2009. Nevertheless, in 2012, as compared to 2011, prices for crop production
decreased by 6.4%, and for livestock products and inputs increased by 1.8% and 4.8%,
respectively. These price index variations during the period of 20082012
predetermined the disproportion (the so-called price scissors) between the purchase
price for agricultural products and the price of inputs (Table 1.6).

Table 1.6. Price indices of agricultural products and inputs in 20082012
(compared to the previous year), per cent
Indicators 2008 2009 2010 2011 2012*
Price scissors 85,3 104,0 116,5 97,0 94,1
Purchase price indices of agricultural products
Total 110,0 77,8 116,3 118,4 98,6
crop products 105,8 69,1 125,6 127,4 93,6
livestock products 112,6 83,1 111,7 113,3 101,8
Price index of inputs
129,0 74,8 99,8 122,0 104,8
* Preliminary data.

19

Most unfavourable for agricultural producers was the year 2008 when prices for
crop and livestock production in comparison with the previous year increased by 5.8%
and 12.6%, respectively, and prices of inputs even by 29.0%. In 2011 and 2012
variations in purchase prices for agricultural production and prices of inputs were again
unfavourable for agricultural producers, but less than in 2008. During the period of
20082012 the most favourable for farmers was the year 2010.
It should be noted that impact of price scissors on crop and livestock production
producers varied. The year 2012 was more favourable for livestock production
producers, since their production purchase prices were by 3.0 percentage points lower
than those of inputs, and in the crop production sector this difference was significantly
higher and comprised 11.2%. The unfavourable impact of agricultural production price
scissors on producers was compensated by direct payments.

3. EU and national support for the development of
Lithuanias agricultural and food sector

Since Lithuanias accession to the EU the Lithuanian economic entities and rural
population have become participants of various support programmes under the Common
Agricultural Policy (CAP) covering issues relating to the rural development, farmers
income maintenance, market regulation, export and fisheries promotion, etc. To ensure
the action of these support programmes, aid is granted to the farmers and rural
population from the EU and national budgets. In 2012 funds for financing of Lithuanias
agriculture comprised LTL 2790.6 million, i.e. by 2.3% more than in 2011 (LTL 2728
million).

Direct payments. The main element of CAP direct payments for more than
20 years is an integral part of the EU farmers income. The funds allocated for EU
direct payments account for 70% of the total CAP financing. These funds are intended
for maintenance of agricultural activities, seeking to minimize losses, i.e. they perform
the function for maintenance of income for agricultural entities and contribute to
reducing the vulnerability of the economic viability of farms. Direct payments in
Lithuania shall be paid for the declared utilized agricultural areas, animals and quota
milk according to the single area payment scheme. In 2012 the major portion of funds
(around 90%) in the country allocated for financing of direct payments was paid from
the European Agricultural Guarantee Fund (EAGF), the remaining part from the
national budget by paying complementary national direct payments (CNDP). With the
increase of the share of the EAGF funds, granted for financing of Lithuanias direct
payments, the share of the CNDP funds has been decreasing. Financing proportions are
regulated by the EU CAP legislation. The share of the CNDP funds is coordinated every
year with the European Commission (EC).
Since 2012 in Lithuania the modulation of direct payments (reduction of the
amount of payments exceeding the established limits, and transfer of the modulated
funds to the Rural Development Fund) has been started. Reduction in payments in the
old EU states has been started since 2005. In accordance with the currently valid
regulation of the Council (EC) No. 73/2009, since 2012 direct payments in Lithuania

20
that are paid from the EAGF shall be reduced by 4% for those economic entities the
amount of payments of which received from the EAGF exceeds EUR 300 thou. (LTL
1.04 million). In accordance with the said regulation, in addition to the reduction of the
EAGF payments, since 2012 the CNDP decrease is foreseen in Lithuania. The total
amount of direct payments, financed from EAGF, payable to economic entities, and the
CNDP, exceeding EUR 5000 (LTL 17.26 thou.), will be reduced by 10%, and
exceeding EUR 300 thou. (LTL 1.04 million) by 4% still more. The amounts
corresponding to the indicated percentage shall be deducted from the CNDP.
Modulation of direct payments from EAGF for animals and utilized agricultural areas
declared in 2012 should comprise about LTL 560 thou. and be adapted to 36 farms in
Lithuania, modulating from each, on the average, around LTL 15.5 thousand.
In 2012 direct payments paid to Lithuanian agricultural entities from the EU
budget amounted to LTL 975.1 million (a total of LTL 1.2 billion was allocated)
(Fig. 1.5). Direct payments were paid for declared utilized agricultural areas, sugar, beef
cattle and sheep (meat breeds). As compared to 2011, the share allocated from the EU
budget increased by 6%, and the share paid became reduced by 10.2%.

1086,0
975,1
929,5
810,7
542,0
139,6
175,3
200,7
360,7
425,9
0
200
400
600
800
1000
1200
1400
2008 2009 2010 2011 2012
EU funds National funds

Fig. 1.5. Funds for direct payments in 20082012, LTL million
Source: Data of the National Paying Agency.

Taking into account the application of modulation in respect of the CNDP for
the year 2012 for declared animals and UAA in Lithuania, the maximum permissible
amount for CNDP payment after modulation was approved LTL 106 million, i.e. by
45.4% less than in 2011 (LTL 194 million). In 2012 the CNDP modulation should
approximately make about LTL 32.3 million. In 2012 the share of the CNDP paid for
the declared animals and UAA in 2011 and the previous year comprised LTL 175.3
million, i.e. by 25.6% more than it was paid in 2011 (LTL 139.6 million).
In 2012 the basic direct payments paid per hectare of UAA (not taking into
account the kind of crops) comprised LTL 406.9, i.e. by 10% more than in 2011
(369.8 LTL/ha) (Table 1.7). This increase was directly coupled with the annually
increasing financing of direct payments from the EAGF. In accordance with the rules
for granting of CAP support, the direct support for agricultural entities engaged in
livestock-breeding is possible for the most part only from CNDP. In 2012 the major part

21
of those payments were allocated in particular to support the livestock-breeding sector,
and this predetermined the withdrawal of CNDP for grain crops, rape, protein crops,
perennial herbs for seed and fodder crop mix. Since 2012 no payments remained for
slaughtered adult cattle either.

Table 1.7. Direct payments in Lithuania in 20082012
Kind of payment 2008 2009 2010 2011 2012
EU budget payments
basic payment, LTL/ha 248 291 341 370 407
quota sugar payment, LTL/t 318 344 344 344 344
energy crops, LTL/ha 155 155
beef cattle payment, LTL/head 426546 511648
sheep (meat breeding) payment, LTL/head 3867 3868
Complementary national direct payments for production*
grain crops, rape LTL/ha 144 99 60 33
protein crops, LTL/ha 251 180 100 75
fibre flax, LTL/ha 348 297 247 217 150
perennial herbs for seed and fodder crop mix,
LTL/ha
100 99 60 33
energy crops LTL/ha 144 99
suckler cows, LTL/head 610 590 590 400 310
bulls, LTL/head 593 593 593 543 600
slaughtered adult cattle, LTL/head 250 220 213 30 0
ewes, LTL/head 48 48 48 40 39
quota milk, LTL/t 87 87 87 70 70
* Total sumof coupled and decoupled payments.
Source: Data of the Ministry of Agriculture.

In 2012 CNDP are foreseen to livestock-breeding economic entities for keeping
of suckler cows, bulls, ewes and quota milk, to crop farming economic entities for fibre
flax.
In 2012, like in 2011, seeking to stimulate the rearing of beef cattle and sheep of
meat breeds in Lithuania, a specific support scheme under Article 68 (1) of the Council
Regulation (EC) No. 73/2009 has been continued. Financing under this scheme is
carried out from the EAGF funds, redistributing the financial envelope of direct
payments for the years 20112013.
Beef cattle keepers meeting the requirements for payments under a specific
support scheme were additionally paid from LTL 511 to LTL 648 per head, and keepers
of sheep of meat breeds were guaranteed a payment from LTL 38 to LTL 68 per head
(Table 1.8).

22
Table 1.8. Direct payments for beef cattle and sheep (meat breeds) in Lithuania
in 2012
Beef cattle groups by number
of heads
Payment by
group, LTL/head
Sheep (meat breeding)
groups by number of
heads
Payment by
group, LTL/head
15 648 150 68
650 625 51100 47
51100 578 101150 44
101150 555 >150 38
>150 511

Under the above-mentioned support scheme, payments were differentiated in
such a way that the larger number of meat animals would predetermine the lower
average payment per head.
From 2012 a requirement, foreseen in the EU legal acts to apply in Lithuania the
CNDP modulation for UAA, animals and quota milk declared in the year 2012,
determined the more rapid decrease in CNDP financing. The application of modulation
for EAGF payments, exceeding EUR 300 thou. and redistribution of EAGF funds in
order to encourage the rearing of beef cattle and sheep conditioned the slower increase
in the 2012 basic direct payments. As compared to 2011, complementary support for
fibre flax, rape, perennial herbs for seed and feed crop mix, and protein crops was
rejected. Moreover, support for fibre flax dropped by about 31% (from 217 to 150
LTL/ha), suckler cows by about 23% (from LTL 400 to 310 per head), whereas
payments for bulls increased by about 10.4% (from LTL 543 to 600 per head).
Payments for quota milk in 2012 remained the same as in 2011 70 LTL/t.

Export refund payments. With a view of making the EU manufactured
products to be competitive on the markets of third countries, the EU countries have been
applying export refund payments for quite a lengthy period for products shipped outside
the EU into third countries. Export refund payments applied for the products
manufactured in Lithuania are of the same rate as in other EU states.
Implementing the EU obligations according to which the countries belonging to
the World Trade Organization (WTO) agree to ensure the parallel cancellation of all
forms of export subsidies (direct export subsidies, export credits, etc.) until the year
2013, export refund subsidies in 2012 went on reducing. Taking into consideration that
export refund payments for milk products have not been granted since 2012, a negative
impact was felt on volumes of dairy products exported to third countries.
In 2012 Poland filed a proposal to the European Commission concerning
granting of payments from the EU budget for export of dairy products to third countries,
and this proposal, however, was vetoed.
In 2012 in Lithuania export refund payments were paid for meat products only
cattle meat, beef, pork and live animals. As compared to 2011, the total amount of
export refund payments reduced by about 36.5%, from LTL 14.3 million in 2011 to
LTL 9.1 million in 2012 (Fig.1.6).

23

29
9
22
40
14
0
5
10
15
20
25
30
35
40
45
2008 2009 2010 2011 2012
Fig. 1.6. Export subsidies paid in 20082012, LTL million

In 2012 in Lithuania 52% of the total export refund payments, i.e. somewhat
more than LTL 4.7 million, was paid for beef. Around 47.4%, i.e. approx. LTL 4.3
million, was paid for cattle meat. The remaining part of export refund payments was
paid for live cattle LTL 45.2 thousand and for pork LTL 7.8 thousand.

Other market regulatory measures. Alongside export subsidies a very
important guarantee for market control, security and agricultural sector stability are such
CAP market regulatory measures (MRM) like production quotas, intervention
purchases, private storage, and consumption promotion.
In 2012 in Lithuania no applications were filed for grain intervention sale due to
the favourable procurement prices on the market.
Moreover, in 2012 just one Lithuanian milk processing company made use of a
private storage measure. 751 t of butter were in private storage, and LTL 71 thousand
from the EU support funds was paid.
In 2012, as in the previous year, the Food Distribution Programme from
Intervention Stocks to the Most Deprived People in the Community was among the
most urgent in the MRM. In 2012 for implementation of this programme in Lithuania
the EC allocated LTL 25.9 million (by 3% less than in 2011), which was used for
distribution of over 6.5 t of foodstuffs to 444.7 thousand people.
As compared to 2011, foodstuffs consumption promotion programmes have
been implemented more intensively. Aiming to improve public health by means of
market regulatory measures, the development of good eating habits of children and
juveniles was undertaken through schools. The activity of the use of the support
programme Milk for Children increased more than twice from LTL 7.1 million (of
which LTL 1.3 million from the EU funds) in 2011 to LTL 15.8 million (of which LTL
2.4 million from the EU funds). The number of supported children increased by more
than 46%, from 136.3 thousand in 2011 to 199.1 thousand in 2012.
The support programme Promoting of Fruit Consumption in Schools has
gained popularity. In the 2011/2012 school year, support amounting to LTL 10.7

24
million (share of the national funds LTL 7.0 million, EU support LTL 3.7 million), i.e.
by nearly 10 times more than in the 2010/2011 school year (LTL 1.2 million), was
granted. For children in pre-school establishments and general education schools in the
2011/2012 school year over 2.5 thou. t of fruits and vegetables (apples, pears, bananas,
citrus fruits oranges, tangerines, grapefruits, lemons , and carrots) were distributed in
schools, i.e. by almost 7 times more than in 2010/2011 (372 t).
The share of MRM granted funds paid in Lithuania is being updated every year
with account taken of the refunds to the budget (EU and national) for administrative or
some other non-compliances for receiving support. In 2012 the MRM financing
excluding export refund payments (LTL 69.8 million) in Lithuania increased by 70.2%
as compared to the year 2011 (LTL 41 million) (Fig. 1.7). Such enhancement in
financing was conditioned by still more increasing popularity of domestic consumption
programmes. The major part of MRM is implemented by means of common financing
funds both from the EU fund and the State budget. The share of the EU funds in
financing the MRM excluding export refund payments comprised about LTL 41.3
million in 2012, or by 10 times more than in 2011. The major part of the above-
indicated funds (about 62.7%) was granted for implementing the Food Distribution
Programme from Intervention Stocks to Most Deprived People in the Community.

18,8
41,3
3,9
13,7
85,0
130,9
37,1
112,9
1,2
28,5
0
20
40
60
80
100
120
140
160
180
200
2008 2009 2010 2011 2012

Fig. 1.7. Funds for intervention market regulation measures excluding subsidies
for export in 20082012, LTL million

In 2012 the share of national funds for the said measures was by about 23.2%
lower than in 2011 and constituted about LTL 28.5 million. The largest portion of those
funds (about 47%) was allocated for the implementation of the support programme
Milk for Children.

25

Rural development measures. Alongside the direct support, the Lithuanian
agricultural entities also have the opportunity to be granted investment and
compensatory support under the 20072013 Rural Development Programme (RDP),
covering more than 50 support measures. Within the period of 20072013 support
amounting to about LTL 7.9 billion is foreseen to be allocated under this programme for
agricultural entities.
Support is allocated for modernization of agricultural holdings, application of
methods for agricultural product manufacture involving environmental protection and
cherishing of traditional rural environment, for training, informing, consulting and
maintaining of income of farmers and rural population farming in less favoured areas, in
Natura 2000 areas and being involved in environment sustainability.
Within the period of 20072012 over 784.7 thousand applications were collected
under all the RDP measures (without technical assistance), the amount of requested
support thereof comprising almost LTL 8.3 billion. Part of the approved support
constituted 97.1% (i.e. 762.1 thousand applications), the aggregate amount of support
reaching LTL 6.6 billion. Until 2013 LTL 4.8 billion was paid, i.e. 61% of the RDP
allocated funds.
In 2012 under the RDP measures 29 calls for submission of applications were
announced, and 131.2 thousand applications for support were received, i.e. just by 2%
less than in 2011. Nevertheless, support requested according to submitted applications
in 2012 was by half less (LTL 977.8 million) than in 2011 (LTL 2 billion), of which the
sum of those approved reached LTL 600 million. In 2012 support amounting to LTL
929.2 million was paid (under Axis 1 measures LTL 450 million, Axis 2 LTL 192.5
million, Axis 3 LTL 181.6 million and Axis 4 LTL 105.1 million), or 12% of the
amount granted for the entire RDP period of 20072013. LTL 696.9 million of support
was paid from the EU budget funds, and the share of the national budget comprised
LTL 232.3 million (Fig. 1.8).

337,5
144,4
136,2
78,8
112,5
48,1
45,4
26,3
0
50
100
150
200
250
300
350
400
450
500
I Axis II Axis III Axis IV Axis

Fig. 1.8. Funds for rural development measures in 2012, LTL million

26

The major part of support in 2012 was paid in Kaunas, Vilnius and Panevys
counties correspondingly, LTL 136.6 million, LTL 135.6 million and LTL 135.1
million, least in the Alytus County LTL 46.4 million. In 2012 the majority of
applications was filed in Utena and Vilnius counties 23.4 and 22.8 thousand,
respectively, and the least number in the Marijampol County about 4.6 thousand.
In 2012 applications submitted under the measures Improving the
Competitiveness of the Agricultural, Food and Forestry Sectors of Axis 1 were not
only less in number (16.7 thou.) than in 2011 (24 thou.), but also the average support
amount indicated in applications (LTL 13 thou.) was by 3.8 times less than in 2011
(LTL 48.9 thou.). Applications submitted under Axis 1 measures in 2012 totalled LTL
217.9 million. Estimating the measures of Axis 1 the major part of applications
(15.1 thou.) stands for the measure Early Retirement where the requested amount
made almost LTL 47.5 million. 99.8% of these applications complied with the
requirements and have been approved. With account taken of the level of the use of the
funds under some measures, certain restrictions started to be applied for applicants.
Under the second area of activities of the RDP measure Modernization of Agricultural
Holdings only dairy farms could apply for support. In 2012 under this measure
39 applications were filed and the requested support amount reached LTL 14.4 million.
Under the measure Setting up of Young Farmers applications could be submitted by
young farmers implementing projects relating to farming in less favoured areas and
involved in livestock farming. In 2012 no applications were collected under the measure
Improvement of Economic Value of Forests and the area of activities Agricultural
Water Resources Management under the measure Infrastructure Related to the
Development and Adaptation of Agriculture and Forestry, as funds allocated for
implementation of these measures have been exhausted.
In 2012 the compensatory measures under RDP Axis 2 Improving the
Environment and the Countryside were most popular. Here compensatory payments
were paid for certain restrictions of activity. In 2012, 106.1 thousand applications for
LTL 513.7 million were submitted under Axis 2 measures. In 2012, 83.8 thousand
applications (63.9% of the total number of the submitted applications) were filed under
the most popular measure Payments to Farmers in Areas with Handicaps, other than
Mountain Areas where payments requested amounted to LTL 154.9 million. In 2012,
under the measure Agri-environment Payments of the same axis, over 17 thousand of
applications (mostly, approximately 14.2 thousand, under the Improving the
Countryside Programme) were submitted, with requested support amounting to LTL
176.3 million.
In 2012 under the measures of RDP Axis 3 The Quality of Life in Rural Areas
and Diversification of the Rural Economy 8.3 thousand of applications were submitted,
and requested support amounted to LTL 194.3 million. Most numerous were applications
under the measure Village Renewal and Development (in 2012, 8.1 thousand of
applications were submitted). Such popularity was due to the collection of applications
which was announced for the first time at the beginning of 2012 under the activity area
Replacement of Asbestos Roofs of the above-mentioned measure. Over 8 thousand
rural residents decided to seize the opportunity to replace old asbestos roof coverings and
requested approximately LTL 50.4 million of support funds. In 2012 the support funds
allocated for the measure Promotion of Rural Tourism Activities amounted to LTL 43
million. As compared to 2011 popularity of this measure was slightly lower. Last year a

27
total of 103 applicants got interested in this measure (121 applicants in 2011), of which
82 submitted applications using non-simplified procedure and 21 used simplified
procedure. The requested amount of support for implementation of rural tourism projects
totalled LTL 52.9 million. In 2012 applications under the measure Support for Business
Creation and Development were not collected as support funds for implementing this
measure have been used completely.
In 2012, while implementing the measures under Axis 4, 72 applications were
submitted (by almost 7 times more than in 2011 11 applications), the requested
support amount constituting approximately LTL 13.9 million (by 8 times more than in
2011). All 72 applications were submitted under the measure Inter-territorial and
Transnational Cooperation.
Continuing the implementation of the 20072013 RDP measures in Lithuania,
the EU budget funds for support paid in 2012 amounted to LTL 696.9 million, and the
share of the national funds comprised LTL 232.3 million.
As in the previous years, in 2012 amendments to legal acts have been prepared,
according to which administrative burden to the applicants has been facilitated: in
implementing certain measures the farmers farm registration and agricultural holding
registration certificates were rejected. A copy of the document certifying the identity of
the applicant and his/her spouse and a legal persons registration certificate were
rejected as well. A requirement to submit a personal identification document copy in
implementing the measure Semi-subsistence Farming was cancelled.
Implementing the measure Restoring Forestry Potential and Introducing
Prevention Actions a requirement for forest enterprises to submit a project for
recreation of forest areas damaged by natural disasters or fires and documents proving
the fact of forest damage was rejected. It was just enough for forest enterprises to
submit an extract from the forest damage registration book or an extract from the forest
fire registration book.
Implementing the measure Village Renewal and Development the
municipalities (as public sector entities) were allowed to submit payment applications
and other documents not only personally or through the authorized person, but also by
post or through courier services.

State aid. With account taken of the sectors sensitive to market changes and
seeking to support the agricultural entities with the lower competitive advantages, State
aid measures are financed from the national budget. In 2012 over 74 million was
allocated for implementing the State aid measures.
In 2012, like in 2011, the following State aid measures were funded: biofuel
production, compensation of part of insurance premiums for agricultural activity
entities, livestock breeding, animal by-products handling, safeguarding of certified
national heritage products, promotion of manufacture, popularization and sales of
qualitative agricultural and food products, development of agricultural advisory, science
and training system, organization of international and national exhibitions, professional,
cultural and educational events, etc.
In 2012 after the ended funding period for the measure Compensatory
Payments to Landowners and Managers for Determined Restrictions on Activities in
Protected Territories Established by the State Authorities support payment was
discontinued.

28
Aiming to promote the production of biofuel and to reduce dependence on the
imported fuel and gas emission causing greenhouse effect, financing of the State aid
measure Support to the Development of Biofuel Production was continued in 2012.
Under the above-mentioned measure support is granted by compensating part of the
price for rape and grain crops purchased for the production of rape oil and dehydrated
ethanol. Of the total number of the State-aid measures the major funding was allocated
to the measure Support to the Development of Biofuel Production 36% (Fig. 1.9), or
LTL 26.7 million, which as compared to 2011 increased by almost 10%.

Insurance payments
compensation
27%
Other state aid measures
18%
Development of biofuel
production
36%
Animal by-products
elimination
6%
Livestock breeding
13%

Fig. 1.9. Structure of state-financed measures in 2012

Insurance of crop areas in Lithuania is nothing new for farmers. After certain
natural calamities hail, rainfall, storm, drought, frost, severe frost, etc. farmers
started insuring more actively the possessed crop areas. In 2012 "VH Lietuva", the only
enterprise involved in insuring crop areas, increased price for its insurance services in
particular cases farmers had to pay by two times higher premiums than in 2011. This
increase was due to the enormous difference between insurance premiums paid by
farmers and amounts paid by the insurance companies to farmers. With account taken
that in 2012 the number of economic entities using insurance services and the area of
the insured crop areas decreased by half (from 270 thou. ha in 2011 to 126 thou. ha in
2012), however, the funds allocated for the measure and paid (LTL 20.3 million) was
just by 25% lower than in 2011 (LTL 27 million). This accounted for 27% of the total
funds allocated for State aid measures.
Another State aid measure of special importance for the growing competitive
advantage in Lithuania is Support to Animal Breeding. With the requirements in
national and foreign markets increasing, animal productivity and genetic potential
should be enhanced and the product quality improved. This process is being accelerated
by the constant development of animal selection and breeding of high-valued pedigree

29
animals, therefore still more funds in the past years have been allocated for the breeding
system development. In 2012 the amount of support for animal breeding comprised
LTL 9.7 million, i.e. by 9% more than in 2011 (LTL 8.9 million) and by 21% more than
in 2010 (LTL 7.7 million). In 2012 animal breeding support constituted 12.9% of the
total funds foreseen for financing State aid measures.
In 2012 nearly LTL 4.4 million or 6% of the funds foreseen for financing of the
State aid measures was granted to the measure Support for Handling of Animal By-
products. This support allowed animal breeders to dispose of dead animals with fewer
losses.

Measures for encouraging the development of the fisheries sector. To
maintain the competitiveness and development of the Lithuanian fisheries sector,
support is granted according to the rules for implementation of the 20072013
Operational Programme for the Lithuanian Fisheries Sector. Funds for the Programme
implementation are granted from the European Fisheries Fund and the national budget
of the Republic of Lithuania. For this purpose the long-term measures of four priority
axes under the 20072013 Operational Programme for the Lithuanian Fisheries Sector
are being implemented.
During 2012, 42 applications for support under the Operational Programme
measures were submitted, i.e. by 36% less than in 2011, whereas in 2012 payments
amounted to LTL 36.9 million, by about 75% more than in 2011 (LTL 21 million)
(Fig. 1.10).

Other
14%
Investments into
aquaculture enterprises
8%
Processing & marketing
of fisheries &
aquaculture products
43%
Water-environmental
measures
19%
Mesures of common
interest
16%
Fig. 1.10. Structure of fishery measures funding in 2012


30
In 2012 as in 2011 no support was granted for the measures of the first priority
axis Adaptation of the Marine Fishing Fleet (until 2011 the goals and aim to preserve
the existing fishing fleet capacities envisaged under the Operational Programme have
been implemented).
In 2012 applications filed under the second priority axis Aquaculture, Inland
Fishing, Processing and Marketing of Fishery and Aquaculture Products made the
major part. Payments for the measures under this axis in 2012 amounted to LTL 28.2
million by 57% more than in 2011 (LTL 17.9 million) of support funds. In 2012,
differently from 2011, the major portion of payments was granted to the second axis
measure Processing and Marketing of Fishery and Aquaculture Products LTL 16.2
million (i.e. by 2.5 times more than in 2011). This difference was conditioned by the
administrative barriers, therefore, the administration of a substantial part of the
applications submitted in 2011 was completed in 2012. In 2012 under the second axis
measure Water Environmental Measures LTL 7 million was paid, i.e. by 14 less than
in 2011.
In 2012 under the third priority axis of the 20072013 Operational Programme
for the Lithuanian Fisheries Sector Measures of Common Interest LTL 6.1 million
was paid, i.e. by two times more than in 2011 (LTL 3.0 million). Such enhancement
was conditioned by the project of the Fisheries Service under the Ministry of
Agriculture of the Republic of Lithuania Support for Implementing a Plan for the
Management of the Stock of European Eel in Lithuania under the third priority
measure Implementation of the Measure for Protection and Development of Aquatic
Fauna and Flora.
Under the fourth priority axis Sustainable Development of Fisheries Areas ,
intended for local action groups in the fisheries areas, support funds in 2012 reached
applicants just according to one measure Implementation of Strategies for the
Development of Fisheries Areas. Financing of this Measure in 2012 comprised LTL
1.9 million, i.e. by 68% more than in 2011 LTL 1.1 million.
In 2012 the termination of part of the RDP and of the measures of the
Operational Programme for Lithuanian Fisheries Sector was predetermined by a level of
the use of funds allocated for the period of 20072013. The total absorption of the
whole support for promotion of Lithuanian agricultural and fisheries sectors is
increasing and contributes to the more competitive and more advantageous development
of these branches of the economy.

4. Economic entities in agriculture and food industry

Agricultural Entities. The number of agricultural entities by categories within
20082012 varied unevenly. In 2012, as compared to 2008, the number of registered
farmers farms increased by 5.3%, and in comparison with 2011 by 2.4%. Within the
referred five years the number of agricultural companies and other agricultural
enterprises, which declared UAA, increased by 32.2%, whereas the number of
households decreased by 21.3% (Table 1.9).


31
Table 1.9. Number of agricultural entities in 20082012
Agricultural entities 2008 2009 2010 2011 2012
Change 2012
compared to 2008, %
Registered farmer farms, thou. 108,0 107,0 108,7 111,1 113,8 5,4
Agricultural companies and
enterprises
602 632 662 734 796 32,2
Households, thou. 108,7 103,2 99,2 94,0 85,5 21,3
Source: Data of the Agricultural Information and Rural Business Centre.

According to the data of Agricultural Information and Rural Business Centre
(AIRBC), with reference to UAA and crop areas declared in 2012 by all agricultural
entities, the average size of a farm in Lithuania by was 17.5 ha (Table 1.10), i.e. by
7.4% larger than in 2011 and by 21.5% larger than in 2008. In total, in 2012 the number
of farms which declared UAA decreased by 4.7 as compared to 2011, whereas their
declared area increased by 2.2%. Even though in 2012, like in 2011, farms covering up
to 5 ha accounted for over 50% of the total number of farms which declared UAA, their
number in 2012, however, decreased by 6.9%. As compared to 2008, the number of
such farms dropped by 14.4 thousand, or by 14.8%. Every year the group of farms with
5.110 ha is also reducing. Within the reference period the number of farms in this
group decreased by 17.1%, but their share in the structure changed insignificantly. The
number of farms in the groups covering from 10.1 to 20 ha, and from 20.1 to 50 ha went
on reducing and in 2012, as compared to 2008, decreased by 11.5and 6.2%, respectively.
Nevertheless, in the structure of farms the share of these groups increased slightly. Within
the period of five years the number of farms increased in the groups with 50.1100 ha and
with 100.1500 ha, respectively by 20.5% and 36.7%. The number of farms in the
group of the largest covering over 500 ha and their share in the structure during
20082012 changed insignificantly.

Table 1.10. Structure of farms by declared agricultural area in 20082012
Farm
size, ha
2008 2009 2010 2011 2012
number,
thou.
share,
%
number,
thou.
share,
%
number,
thou.
share,
%
number,
thou.
share,
%
number,
thou.
share,
%
<5 97,1 53,3 94,6 53,6 92,1 53,6 88,8 53,1 82,7 51,8
5,110 42,0 23,0 39,3 22,3 37,4 21,7 36,3 21,7 34,8 21,8
10,120 22,7 12,4 21,7 12,3 20,9 12,2 20,6 12,3 20,1 12,6
20,150 12,9 7,1 12,8 7,2 12,6 7,4 12,2 7,3 12,1 7,6
50,1100 4,4 2,4 4,6 2,6 4,9 2,9 5,1 3,0 5,3 3,3
100,1500 3,0 1,6 3,2 1,8 3,4 2,0 3,8 2,3 4,1 2,6
>500 0,4 0,2 0,4 0,2 0,4 0,3 0,4 0,3 0,5 0,3
All farms 182,5 100 176,6 100 171,8 100 167,3 100 159,5 100,0
Average 14,4 15,0 15,6 16,3 17,5
Sources: Data of the Register of Agriculture and Rural Business of the Republic of Lithuania. (The Register of Holdings) and
Simplified Direct Payments Information System.


32
Decrease in the number of farms was influenced by several factors. Due to the
processes of restructuring, farms are becoming larger. Some part of the senior farmers,
receiving the EU support, is giving up the commercial agricultural production.
Moreover, some farmers refuse to declare their areas due to the strict requirements set
with regard to good agrarian and environmental condition.
Even though the average size of a farm in Lithuania has been increasing within
the recent five years, farms here are smaller than in the neighbouring countries. In 2010
in Latvia farms, on the average, were by 1.2 times larger, and in Estonia by 2.7 times
larger (Fig. 1.11). The farmers farms in Lithuania, however, were larger, on the
average, than those in Poland (by 1.8 times) and Slovenia and Hungary.
1
4
3
5
6
8
7
6
13
6
14
19
16
24
25
29
32
34
43
39
52
46
57
60
28
89
1
3
3
5
6
8
8
10
12
12
18
19
22
24
26
32
36
36
43
48
54
56
60
63
77
84
152
71
0 20 40 60 80 100 120 140 160
Malta
Cyprus
Romania
Greece
Slovenia
Italy
Hungary
Poland
Portugal
Bulgaria
Lithuania*
Austria
Latvia
Spain
Netherlands
Belgium
Ireland
Finland
Sweden
Estonia
France
Germany
Luxembourg
Denmark
Slovakia
United Kingdom
Czech Republik
2010
2007

* 2008, 2012 m.

Fig. 1.11. Average farm size in some EU countries in 2007 and 2010, hectares
Sources: Data of Eurostat and the Agricultural Information and Rural Business Centre.

33

86% of the farms in Lithuania are small-scale farms, under 20 ha, they account for
27% of the total area covered by the farms in the country. The relatively worse situation is
in Romania (by number 99%, by area 43%), Bulgaria (by number 96%, by area 15%),
Slovenia (by number 95%, by area 80%), Poland (by number 92%, by area 53%). The
biggest number of large farms (over 100 ha) is in the United Kingdom (by number 21%, by
area 71%), Luxembourg (by number 20%, by area 49%), Denmark (by number 19%, by
area 65%), and the Czech Republic (by number 19%, by area 89%). In Lithuania the farms
larger than 100 ha account for 3% with 47% of all UAA belonging to them (Table 1.11).

Table 1.11. Farm structure by area and number in Lithuania and other
EU countries in 2010, per cent
Country
4,9 ha 519,9 ha 2049,9 ha 5099,9 ha 100 ha
area number area number area number area number Area Number
Belgium 2 23 10 28 30 28 34 16 24 5
Bulgaria 10 91 5 5 5 2 5 1 75 1
Czech Republic 0 15 2 36 4 19 5 11 89 19
Denmark 0 7 8 38 11 22 16 14 65 19
Germany 0 9 8 38 15 25 22 17 55 11
Estonia 4 34 11 37 14 14 16 6 55 9
Ireland 1 7 13 35 36 40 28 15 22 3
Greece 28 77 34 18 21 4 10 1 7 0
Spain 4 53 23 26 16 11 10 5 47 5
France 2 27 4 19 11 17 25 19 57 18
Italy 15 73 22 19 19 5 14 2 29 1
Cyprus 38 89 22 8 15 2 11 1 14 0
Latvia 11 34 21 48 14 12 12 3 42 3
Lithuania* 8 52 19 34 13 8 13 3 47 3
Luxembourg 1 17 3 18 10 16 36 29 49 20
Hungary 9 87 7 8 7 3 7 1 70 1
Netherlands 11 29 13 28 10 27 8 13 58 3
Austria 8 32 25 39 29 21 17 6 20 2
Poland 16 55 37 37 18 6 8 1 21 1
Portugal 16 76 15 17 10 4 8 1 51 2
Romania 30 93 13 6 4 0 4 0 49 1
Slovenia 28 61 52 34 13 4 3 1 4 0
Slovakia 1 64 2 18 2 6 2 3 93 9
Finland 3 10 20 33 34 34 26 17 16 6
Sweden 4 13 23 42 20 21 18 13 35 11
United Kingdom 1 9 4 29 9 24 15 17 71 21
* 2012.
Sources: Data of Eurostat and the Agricultural Information and Rural Business Centre.

34

According to the AIRBC data, by the end of 2012, the Lithuanian Register of
Holdings held a record of 199.2 thousand of natural persons owners of the holdings.
As compared to 2011, the number of registered holdings decreased by 5.0%. Such a
decrease in the number of holdings resulted from the simplified procedure for
withdrawal of the holdings from registration after the death of the owner on condition
that agricultural activity has not been carried out for three years or the data were not
updated for the same period. Due to those amendments 11.0 thousand of holdings where
agricultural activities were not carried out and the data whereof did not comply with the
actual situation were removed from registration or their removal was initiated. Even
though the number of holdings decreased substantially, the area of land managed by the
owners changed very insignificantly just by 0.1%, to 2.83 million ha of the total land
area, where their managed UAA area did not change (reached 2.3 million ha). This
evidences that no agricultural or alternative activities have been carried out in the
holdings removed from registration. The average size of a holding in 2012 by total
holding area was 14.1 ha, by UAA 11.8 ha. The number of holdings with UAA up to
5 ha comprised 64.5% of all the holdings (12.6% of all UAA) (Fig. 1.12). In 2012, as
compared to 2011, the number of holdings of that size decreased by 6.6%, since the
majority of holdings removed from registration was small-scale holdings. The number
of holdings covering 520 ha increased insignificantly in the structure 0.5 percentage
point, and by the portion of UAA decreased by 0.5 percentage points. In 2012, the
number of UAA increased in the group of 100300 ha. The total UAA area and the
number of holdings in this group increased by more than 2.8%. In the group of over 300
ha the total number of holdings and the total UAA area increased by 3.6 and 3.9%,
respectively.

52,6
0,3
1,1 2,1
5,1
26,5
11,9
23,3
15,3
11,5
14,6
21,8
12,2
0,4
0
10
20
30
40
50
60
01 1,015 5,0120 20,0150 50,01100 100,01300 300
Groups by holding area, ha
Number of holdings Utilised agricultural area

Fig. 1.12. Distribution of holdings and their agricultural area by group of
different size in Lithuania in 2012, per cent
Source: Data of the Register of Agriculture and Rural Business of the Republic of Lithuania.

In the areas favourable for farming 54.8% of UAA in the total number of
registered holdings are registered. In 2012, 44.0% of the owners of all holdings were

35
over 60. This tendency has also retained in the analysis of holding owners by regions,
where the share of owners over 60 in highly disadvantaged areas exceeds 51.2%. Young
farmers under 40 accounted for 13.0% of all the holdings in the country, their largest
share in the areas favourable for farming making 13.5% (Table 1.12).

Table 1.12. Distribution of holdings by type of farming area and owners age in 2012
Indicators
Areas
highly disadvantaged less disadvantaged normal
Number of holdings, % 11,0 41,1 47,9
Area of holdings, % 8,5 36,7 54,8
Average size of holding, ha 11,0 12,8 16,4
Number of holding owners
by age, %
<40 year 11,2 13,0 13,5
4060 year 37,6 42,4 44,7
>60year 51,2 44,6 41,8
Source: Data of the Register of Agriculture and Rural Business of the Republic of Lithuania.

Almost half of UAA is managed by 113.8 thousand owners of registered
farmers farms 57.6% of the owners of all holdings. The number of registered farmers
farms in 2012 increased by 2.4%, as compared to 2011. Over the period of 20112012
the structure of farmers farms did not change, though a slight increase was noted in all
groups. In Lithuania the farms covering from 3 to 10 ha of land (41%) prevailed, farms of
up to 3 ha comprised 30% in the structure, the largest farms accounted for 2%. This
reveals that an insignificant process of farm expansion is going up (Fig. 1.13).

2
9
19
43
27
1
7
16
42
35
2
9
18
42
29
2
9
18
41
30
2
9
18
41
30
0 5 10 15 20 25 30 35 40 45 50
>50
2050
1020
310
<3
ha
2012
2011
2010
2009
2008

Fig. 1.13. Number of registered family farms by size in 20082012, per cent
Source: Data of the Register of farmers farms of the Republic of Lithuania.

36

The structure of registered farmers and holding owners by age was similar, since
41% of the registered farmers and owners of holders was at the age of retirement (over
62) and 17.2% persons under 40, i.e. young farmers (Fig. 1.14).

2639 year
15,5%
5562 year
13,6%
>62 year
41,0%
<25 year
1,7%
4054 year
28,2%

Fig. 1.14. Structure of registered farmers by age in 2012
Source: Data of the Register of farmers farms of the Republic of Lithuania.

The EU CAP measures have impacted the process of farm restructuring. Under
the 20072013 Rural Development Programme, as during the previous period, senior
farmers are entitled to give up commercial agricultural production and transfer land
holdings to younger farmers. Aiming at accelerating the process of farm restructuring,
support is granted to semi-subsistence farms by reorganizing them into commercial
farms. Moreover, support is granted to agricultural entities implementing the EU
veterinary, sanitary and environmental requirements. In 2012 the National Paying
Agency collected 132.8 thousand applications for the EU support under the rural
development measures. The requested amount was by 51.3% lower than in the previous
year LTL 0.98 billion. Rural people found two measures under Axis 1 most attractive
Use of Advisory Services and Setting up of Young Farmers.
In 2012 the certified organic production area in Lithuania covered 162.7 thou.
ha. During the reference period of 20082012 the certified area increased by 27.7%, and
the number of farmers since 2008 has decreased by 10.5%. In 2012, as compared to
2011, the area increased by 3.0%, the number of farms dropped insignificantly by
3.3% (Fig. 1.15). The average size of the certified farm (including fisheries farms) in
2012, as compared to 2011, went up from 60.8 to 64.8 ha.

37
127,4
135,0
149,1
158,0 162,7
2511
2598
2668 2679
2805
0
100
200
300
400
500
2008 2009 2010 2011 2012
t
h
o
u
.

h
a
2000
2200
2400
2600
2800
3000
N
u
m
b
e
r
Certified area, thou. ha Number of farms

Fig. 1.15. Number of organic farms and certified area in Lithuania in 20082012
Source: Data of the Public Enterprise Ekoagros.

Food industry enterprises. In 2012, 890 enterprises for manufacture of food
products and beverages were in operation in Lithuania, including 21.7% individual
enterprises. During the period of 20082012 the total number of enterprises increased
by 0.7%, and the number of individual companies decreased by more than 36.3%
(Fig.1.16).

884
851
896
844
890
303
259
242
205 193
0
200
400
600
800
1000
1200
2008 2009 2010 2011 2012
Total Individual enterprises

Fig. 1.16. Number of enterprises of manufacture of food products and beverages
in 20082012

38

According to the Department of Statistics, most of food production companies
are located close to the major cities. 25.6% of all food and beverage production
enterprises are sited in Kaunas County, 19.4% in Vilnius County (Fig. 1.17). The least
number of food industry enterprises is in the counties of Utena and Alytus, accounting
for 2.8% and 3.9%, respectively. In 2012, if compared to 2011, the number of
enterprises in almost all the counties got increased. The number of food and beverage
production increased most of all in the counties of Vilnius, Kaunas and Taurag by
13.8%, 7.5% and 4.5%, respectively.

25
35
38
46
48
84
106
107
173
228
0 50 100 150 200 250
Utena
Alytus
Teliai
Taurag
Marijampol
iauliai
Klaipda
Panevys
Vilnius
Kaunas

Fig. 1.17. Number of enterprises of manufacture of food and beverages by county
in 2012 (at the end of the year)

During the reference period of 20082012, the number of companies in certain food
production sectors preservation and processing of fish and fish products, preparation,
processing and conservation of fruit, berries and vegetables increased by 2.1% and 1.4%,
respectively. The number of enterprises involved in the manufacture of grain milling
products, starch and starch products, meat and meat products, milk and dairy products
dropped 17.6%, 8.2% and 7.4%, respectively (Table 1.13).
The total number of employees involved in the manufacture of food products
and beverages in 2012, as compared to 2011, decreased slightly by 0.4%, but in
comparison with 2008 by 13.5%. During the reference period of 20082012, the
highest decrease in the number of employees was fixed in 2012. Tendencies in various
sectors were different. In 2012, as compared to 2011, the decrease in employees was
most substantial in the sector of the manufacture of meat and meat products 19.7%
and in the sector of milk and dairy products 10.0%. In comparison with 2011, the
number of employees went up in the companies involved in the preparation, processing
and conservation of fruit, berries and vegetables (by 1.9%). In 2012 if taken by sector
the majority of enterprises operated in the sector of bakery products (349 enterprises)
and in the sector of manufacture of meat and meat products, whereas by employee
number they were relatively smaller than the enterprises in other sectors.


39
Table 1.13. Entities of the food industry in 20082012
Indicators 2008 2009 2010 2011 2012
Production of food products and beverages
Number of enterprises 884 851 896 844 890
Number of employees 47183 49465 42957 41000 40828
Sales in domestic market, LTL mill. 6405,5 5552,6 6337,6 7341,5 7877,7
Export value, LTL mill. 3359,0 3099,5 4247,5 4971,7 5728,3
Production of grain milling products and starch
Production of meat and meat products
Production of milk and dairy products
Preservation and processing of fish and fish products
Sales in domestic market, mill. Lt 234,1 205,1 234,5 256,1 265,0
Export value, mill. Lt 659,0 701,9 898,0 989,2 1025,3
Preparation, processing and conservation of fruit, berries and vegetables
* VAT and excise duty incl.

40

The process of production concentration in the Lithuanian industry of food
products and beverages though slowly but is continuing. In the period of 20082012 the
total number of production enterprises varied and in the past years has increased,
however, with the reduction of the number of employees, the average number of
employees per enterprise decreased by 14.1%. The average number of employees in
different sectors in 2012 varied distinctly: the smallest number was in the sector of
preparation, processing and canning of animal and vegetable fats and oils, and in the
sector of preparation, processing and canning of fruit, berries and vegetables (16 and 27,
respectively), and the biggest number was in the manufacture of milk and dairy products
and in the preparation and processing of fish and fish products (229 and 93 employees,
accordingly.
In 2012, enterprises involved in the manufacture of food products and beverages
in the counties of Teliai, Marijampol and Utena were most numerous by employee
number. This tendency has persisted for years. By average number of employees per
enterprise the counties of Teliai, Utena and Marijampol are in the lead, being ahead of
the average in Lithuania by 2.6; 1.8 and 1.5 times, respectively (Fig. 1.18).

46
30
33
33
34
41
47
56
67
81
118
0 20 40 60 80 100 120 140
Lithuania
Alytus
Vilnius
Klaipda
iauliai
Panevys
Kaunas
Taurag
Utena
Marijampol
Teliai

Fig. 1.18. Average number of employees per enterprise of manufacture of food and
beverages by county in 2012 (at the end of the year)

44.3% of the total number of the enterprises operating in the manufacture of
food products and beverages in Lithuania by employee number are assigned to very
small (less than 10 employees), 35.6% to small (1049 employees) and 16.4% to
medium-sized (50249 employees) companies (Fig. 1.19). Enterprises with over 250
employees accounted for 3.7% in 2012, whereas the number of employees working here
comprised nearly 42.3% of the total number of employees involved in the manufacture
of food products and beverages.

41

09
44,3%
1019
17,8%
2049
17,8%
5099
10,2%
100249
6,2%
250499
2,4%
500999
1,0%
1000
0,3%

Fig. 1.19. Structure of enterprises of manufacture of food and beverages
by number of employees in 2012

Product sales volumes of the enterprises demonstrate changes and a level of
production concentration. In 2012, as compared to 2008, the sales per enterprise of the
manufacture of food and beverages increased, on the average, by 19.6%, and, if
compared to 2011, by 10.5%.
The most rapid increase of production concentration was in the sector of
production of grain milling products, starch and starch products where the average
production volumes per enterprise within five years increased by 1.8 times, in the sector
of preservation and processing of fish and fish products by 1.4 times and in the sector of
preparation, processing and canning of fruit, berries and vegetables by 1.3 times.
The highest concentration of production is fixed in the sector of milk and dairy
products where average sales volumes per enterprise in 2012 amounted to LTL 148.6
million, and revenues raised by four biggest companies accounted for 79% of the total
revenues in the sector. Sales volumes in the industry of preservation and processing of
fish and fish products were by 1.7 times higher than the average sales volumes per food
production enterprise.
If assessed by counties, in 2012 the average revenues derived from the sales per
food and beverage production company were highest in the counties of Teliai, Utena,
Marijampol and Panevys. One food production company in the Teliai County
received by 2.2 times more revenue than one company on the average in the country and
by 5.7 times more than one company in the iauliai County. Relatively high revenue
was gained by the companies in the branch under analysis operating in the Utena
County. They exceeded the national average by 1.9 times (Fig. 1.20). Such a high
average level of revenues per company was conditioned by the fact that the largest food

42
production companies, like AB Rokikio sris , AB Pieno vaigds and AB
emaitijos pienas, were operating in the above-mentioned counties.

14,1
5,5
5,6
10,5
12,1
15,7
17,9
26,8
31,3
14,0
16,1
0 5 10 15 20 25 30 35
Lithuania
iauliai
Alytus
Klaipda
Vilnius
Taurag
Kaunas
Panevys
Marijampol
Utena
Teliai

Fig. 1.20. Average annual income from sales per enterprise of manufacture of food
and beverages in Lithuania by county in 2012, LTL million

Average revenues gained by the companies involved in the manufacture of food
products and beverages in 2012 were by 3.7% higher than in the previous year. The
important factor that predetermined such tendencies was the increased consumption on
the domestic and foreign markets. The development of the food and beverage industry
in the future will be ensured due to the existing domestic and foreign markets and
search for new markets.

Production of Agricultural and Food Products and
Sales in the Domestic and Foreign Markets

43

II. PRODUCTION OF AGRICULTURAL AND FOOD
PRODUCTS AND SALES IN THE DOMESTIC AND
FOREIGN MARKETS

1. Changes in trade of agricultural and food products
in the domestic market

In 2012 a tendency for export growth has become more distinctly expressed,
whereas domestic market even declined. Export increased by 11.8%, and final domestic
demand covering houshold and State expenditure and investments as calculated at
comparable prices decreased by 0.5%. A decline was conditioned by 14% investement
reduction. Domestic demand dynamics in the food industry is different.
Food, beverages and tobacco turnover in terms of value within the reference
period decreased by 8.9%, and if calculated per capita increased by 2.2%. Different
tendencies were partly due to the reduction in the number of the population. It should be
noted that sales that decreased in 20092010 started growing again in 2011 and in 2012
exceeded the level of 2011 by 4.5%, and if calculated per capita even by 12.5% (Table
2.1). This was influenced not only as a result of the increased wages, but also due to the
increasing expenditure for food in the household budget.

Table 2.1. Retail sales of food products, alcoholic beverages and tobacco products
in 20082012
Indicators 2008 2009 2010 2011 2012
Change 2012
compared to 2008,
%
Total sales, LTL mill. 13192,4 11391,5 10717,2 11498,5 12020,4 8,9
Per capita, LTL 3929 3411 3261 3569 4015 2,2
Source: Data of Statistics Lithuania

In 2012 the average monthly net earnings increased by 4.1%, and the price index
of food products (in December 2012, as compared to December 2011) was lower by
3.8%. Nevertheless, as compared to 2011, in 2012 for the population of the country only
dairy product prices were more affordable, whereas other food products, especially
eggs, were less affordable (Table 2.2).

44
Table 2.2. Purchasing power of net earnings of employees in the whole economy
in 20082012
Indicators 2008 2009 2010 2011 2012*
Change 2012
compared to
2008, %
Average monthly net earnings, LTL 1651 1602 1552 1595 1661 0,6
Purchasing power of average monthly net earnings in IV Q
beef ham with bone, kg 92 86 101 91 86 6,5
pork ham without bone, kg 124 125 130 124 117 5,6
milk, 2.5% fat, l 703 778 773 658 662 5,8
butter, 82% fat, kg 87 93 78 81 71 18,4
eggs, 10 pcs 410 400 442 459 325 20,7
rye bread, kg 403 379 362 342 330 18,1
sugar, kg 554 521 543 424 417 24,7
*LIAE calculations.

According to the data of the Department of Statistics, in 2012 was harvested a
record grain amount by 43% higher than in 2011. Indicators for livestock slaughtered,
milk produced and sugar beets grown were higher than in 2011, wheres egg production
dropped. The purchase of agricultural products was considerably higher than in the
previous years, grain purchase was even by 87.6% and rapeseed purchase by 1.5 times
higher (Table 2.3).

Table 2.3. Production and purchase of agricultural products in 20082012,
thousand tonnes
Indicators 2008 2009 2010 2011 2012
Change 2012
compared to
2008, %
Production
Grain production 3484 3892 2867 3304 4737 36,0
Sugar beet for industry 339 682 723 878 1003 3,0*
Livestock & poultry, slaughtered (l.w.) 295 272 296 299 315 6,8
Milk production 1884 1791 1737 1754 1820 3,4
Egg production, mill. pieces 891 853 825 817 810 9,1
Purchase
Grain 2398 2544 1916 1648 3092 28,9
Rapeseed 299 368 386 395 582 94,6
Potatoes 49 50 55 46 49 0,0
Vegetables 56 57 56 47 56 0,0
Fruit & berries 40 23 25 41 49 22,5
Livestock & poultry (l. w.) 243 215 235 234 244 0,4
Natural milk 1376 1274 1278 1317 1360 1,2
Milk (equivalent of base fatness) 1661 1534 1540 1587 1638 1,4
Eggs, mill. pcs. 454 448 446 412 412 9,3

45

In Lithuania a record grain harvest in 2012 has not reduced the purchase prices,
but even made them higher due to the grain shortage in the world. In our country the
purchase prices for food wheat increased in the second half of the year by about 15%,
whereas prices for wheat products flour and wheat flour bread did not get increased
(Table 2.4). Dairy product prices were also lower, as in summer milk purchase prices
dropped even by 20%. Retail prices for other most important products in 2012 were by
510% higher than in 2011. Only egg prices became distinguished due to the ungrounded
growth in prices resulting from adapting of new EU regulations.

Table 2.4. Retail prices of food products in December 20082012, LTL per kilogram
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Beef ham with bone 18,44 18,69 16,47 18,72 19,58 6,2
Pork ham with bone 13,09 11,88 10,63 11,36 12,43 5,0
Chicken, drawn 8,49 8,80 8,11 8,59 9,05 6,6
Boiled sausages, best quality 16,50 16,31 16,37 15,90 17,08 3,5
Milk, 2.5 % fat, LTL/l 2,32 1,84 2,26 2,50 2,41 3,9
Butter, 82 % fat 18,26 18,98 22,09 23,96 22,91 25,5
Curd, 59 % fat 11,63 9,67 11,41 12,59 12,41 6,7
Eggs, 10 pcs 4,33 4,14 3,72 3,73 5,15 18,9
Best quality wheat flour 2,30 2,24 2,40 2,59 2.41 4,8
Rye bread 4,43 4,32 4,62 4,98 5,05 14,0
Best quality wheat flour bread 5,08 4,90 5,42 5,70 5,45 7,3
Potatoes 1,31 0,85 1,20 0,78 0,81 38,2

The share of sales of agricultural and food products on the domestic market
shows that a substantial proportion of the processed agricultural products is exported by
the Lithuanian milk producers, cattle breeders, poultry farms and vegetable and fruit
processors (Table 2.5). Nevertheless, the share of sales of pork and grain products
remains high on the domestic market.

Table 2.5. The share of sales of key food products in the domestic market
in 20082012, per cent
Products 2008 2009 2010 2011 2012
Dairy products 48,7 50,3 50,0 48,9 47,2
Beef 29,3 28,3 27,0 24,6 38,9
Pork 94,8 95,7 87,7 94,6 94,2
Poultry meat 77,2 71,1 63,3 72,3 62,1
Eggs 70,0 92,3 100,0 97,8 76,3
Rye bread 96,5 95,2 94,7 95,0 95,4
Potato products 44,8 46,1 45,5 56,7 30,1
Fruit and vegetable products 59,9 78,7 65,2 64,5 67,6

46

A significant part of agricultural products is exported by the producers directly:
grain (about 40%), calves (about 40%), pigs (about 20%).
About 4% of all the food products is sold on market places. Meat and meat
products account for almost half of these products (Table 2.6).

Table 2.6. Turnover of food products on market places in 20082012, LTL million
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Food products 595,4 581,0 539,8 479,4 431,8 27,5
Meat and meat products 334,0 334,4 312,6 263,3 219,4 34,3
Vegetables and potatoes 128,1 124,4 111,4 108,0 111,9 12,6
Fruit and berries 62,0 54,6 47,5 47,4 44,0 29,0
Milk and milk products 13,7 16,0 15,8 14,4 12,4 9,5
Eggs 25,2 23,0 19,1 14,0 10,6 58,0
Other food products 32,5 28,6 33,3 32,2 33,5 3,1

Maisto produkt apyvartos sumajimas turguose per 20092012 metus susijs
ne tik su krizs laikotarpiu, bet ir su kasos aparat vedimu dengtose vietose.
The decrease of food product turnover on market places during the period of
20092012 is not only related to the period of crisis, but also with the introduction of
cash register counters to be used in covered sites.

2. Foreign trade in agricultural and food products

At the beginning of the reference period due to an economic crisis the decreased
export and import in agricultural and food products recovered in 2010 and in later years
went on increasing every year. In 2012, as compared to the pre-crisis year 2008, export
value increased by more than 1.6 times, import by almost 1.4, and foreign trade
turnover by 1.5 times. In 2012, as compared to 2011, exports increased by 1.3 and
imports by almost 1.2 times.
According to the preliminary data of the Department of Statistics (as at 15
February 2013), in 2012 Lithuania exported agricultural and food products for LTL 14.6
billion and imported for LTL 11.2 billion. Exports of products of Lithuanian origin
reached LTL 9.7 billion, constituted 66% of the total exports of agricultural and food
products and increased by 25% and exports of non-Lithuanian products was up by 1.3
times. Balance of trade was positive and as compared to 2011 increased by LTL 1.4
billion (Fig. 2.1). Foreign trade turnover reached LTL 25.9 billion. The rate of import
coverage by export made 130%.


47
8893
7979
9710
11530
14632
8140
6650
7978
9580
11244
754
1329
1733
1950
3388
0
2000
4000
6000
8000
10000
12000
14000
16000
2008 2009 2010 2011 2012
Eksportas / Export Importas / Import Balansas / Balance

Fig. 2.1. Export, import and foreign trade balance of agricultural and food
products in 20082012, LTL million

The share of agricultural and food products in Lithuanias foreign trade has been
increasing every year until 2009. In 2009 it was highest throughout many years: exports
accounted for 19.6%, imports for 14.7%, and the total turnover for 17.0%. This was due
to the reduction of the purchasing power of the population during crisis in Lithuania and
other countries. For that reason the demand for not essential goods fell down, and less
food products were bought. In 2010, with the revival of Lithuanias and global
economy, the share of agricultural and food products started decreasing. In 2010 their
export share amounted to 18.0% and that of import to 13.1%, in 2011 even less,
respectively, 16.6 and 12.%, whereas in 2012 it went up again (1.8 and 0.8 percentage
points, respectively) and constituted 18.4 and 13.0%.
The EU share of exports of agricultural and food products after its increase in
2009 later went on dropping annually from 64% in 2009 to 54% in 2012, even though
the value of exports grew within the whole period, and in 2012 compared to 2008 after
having increased by 1.5 times it comprised LTL 7852 million. The share of export to
third countries within the same period increased from 36 to 46%, and in 2012 its value
reached LTL 6780 million (compared to 2008 went up by 1.8 times). Exports to Russia ,
Belarus and Kazakhstan (the present Customs Union) also have increased, and the
value, in comparison with 2008, increased by 1.7 times and if compared to 2009 by
2.3 times and amounted to LTL 4805 million. The share of exports to this group of
countries increased from 26% in 2009 to 33% in 2012 (Fig. 2.2).


48
64,2
60,4
58,4
53,7
9,5 8,9 9,2
13,5
57,5
32,8 32,4
30,7
26,3
32,2
10,3
0
20
40
60
80
2008 2009 2010 2011 2012
EU-27 Russia, Belarus, Kazakhstan Other third countries

Fig. 2.2. The share of export of agricultural and food products to various country
groups in total Lithuanias export in 20082012, per cent

In 2012 Lithuania exported goods into 182 countries, agricultural and food
products were exported into 131 countries (of Lithuanian origin into 129 countries). The
major share of exports included vegetable products (CN Section II). Their value reached
LTL 5977 million and accounted for 40.8% of the total value of exported agricultural
and food products. Prepared foodstuffs, beverages, spirits and tobacco products
comprised 32.9% (CN Section IV, LTL 4820 million), live animals and animal products
25.1% (CN Section I, LTL 3666 million), and fats and oils only 1.2% (CN Section III).
The major part (90%) of Lithuanian products consisted of products under CN
Section I (Fig. 2.3).

90,2
50,5
38,7
68,2
9,8
49,5
61,3
31,8
0%
20%
40%
60%
80%
100%
Live animals, animal
products
Vegetable products Fats and oils Prepared foodstuffs,
beverages, tobacco
Lithuanian origin Non-Lithuanian origin

Fig. 2.3. Structure of export by CN section and origin of products in 2012, per cent
Source: Data of Statistics Lithuania..

Compared to 2011, exports of products under 20 of the 24 CN sections
increased. The highest increase of export covered cereals by 2.1 times, oil seeds by

49
1.9 times, vegetables by 1.3 times, fruit by 1.2%, beverages and spirits by 1.4 times,
milk and dairy products, eggs, honey by 15% (Fig. 2.4).

251
676
752
1652
22
102
951
1226
124
859
324
398
7
0
130
415
281
259
269
142
425
681
694
889
265
735
734
1898
33
160
1267
1519
154
1781
317
774
4
0
169
517
359
286
392
163
490
928
792
893
0 400 800 1200 1600 2000 2400
01 Live animals
02 Meat and edible meat offal
03 Fish and crustaceans
04 Dairy produce; birds eggs; natural honey
05 Animal products, not elsewhere specified
06 Live trees and other plants; cut flowers
07 Edible vegetables
08 Edible fruit and nuts
09 Coffee, tea and spices
10 Cereals
11 Products of the milling industry, malt; starch
12 Oilseeds; straw and fodder
13 Lac; vegetable extracts
14 Vegetable plaiting materials
15 Animal or vegetable fats and oils
16 Preparations of meat and of fish
17 Sugar and sugar confectionery
18 Cocoa and cocoa preparations
19 Preparations of cereals, flour, starch or milk
20 Preparations of vegetables, fruit, nuts or other parts of plants
21 Miscellaneous edible preparations
22 Beverages, spirits and vinegar
23 Residues and waste fromthe food industries; prepared
animal fodder
24 Tobacco and manufactured tobacco substitutes
2011
2012

Fig. 2.4. Exports of agricultural and food products in 2011 and 2012, LTL million

As in the previous years, the largest part of exports belonged to dairy products,
eggs and honey for LTL 1898 million (CN Chapter 04, accounted for 13.0% of the
total agricultural and food product exports). Due to the exclusive harvest of cereals in
2012, their export increased substantially, its value amounting to LTL 1781 million
(12.2% second as to the share of exports by volume). Exports of fruit (for LTL 1519
million, accounted for 10.4%) and vegetables (LTL 1267 million, 8.7%) were
considerable.

50
The structure of the total exports of agricultural and food products differs from
the structure of exports of the products of Lithuanian origin. The key products of
exports dairy products and cereals made one fourth (24.7%) of the total exports and
over one third (36.1%) of the exports of Lithuanian origin products.
The value of the products of Lithuanian origin exported in 2012 amounted to
LTL 9678 million (66% of the total exports of agricultural and food products).
Compared to 2011, the value increased by 25%. 60% of the products of Lithuanian
origin included milk and dairy products, eggs and honey, cereals, tobacco products, oil
seeds, residues and waste from the food industries and prepared animal fodder.
Over 50% export share was taken by the products of Lithuanian origin in fifteen
chapters out of products under twent-four CN chapters, mostly over 90% tobacco
products, cereals, products of the milling industry, live animals, milk and dairy
products, and oil seeds. Various beverages manufactured in Lithuania accounted for
34% of the total exports of beverages, vegetables 13% of the total vegetable exports,
fruit 6% of the total export of fruit, and coffee, tea and spices 4% of exports of the
respective products (Fig. 2.5).

256
623
579
1826
164
93
1721
306
712
431
278
202
255
85
197
317
631
890
0
0
0 400 800 1200 1600 2000
01 Live animals
10 Cereals
20 Preparations of vegetables, fruit, nuts or other parts of
plants
animal fodder
Lithuanian origin Non-Lithuanian origin

Fig. 2.5. Exports of Lithuanian and non-Lithuanian origin agricultural and food
products in 2012, LTL million

51
Within the reference period, exports of almost all Lithuanian origin products
have increased (upon analysis of the CN chapters of two symbols). Exports of cereals
increased most of all by 2.1 times. Export of oil seeds was by 2.0 times higher,
preparations of cereals, flour, starch or milk and beverages and spirits by 1.4 times, and
sugar by 1.3 times.
In 2012 the value of exports of milk and dairy products, if compared to 2011,
increased by 13.8%. Milk and dairy products accounted for 12.5% of the total exports of
agricultural and food products, whereas part of the total exports of these products
decreasd by 1.6 percentage points. 97% of the above-mentioned products were
manufactured in Lithuania.
Within the reference period, export of Lithuanian milk and dairy products
increased by 14%, its value reaching LTL 1769 million. 52% of the export of dairy
products consisted of cheeses and curd. Exports of these products totalled 78.6 thou. t,
by 14.9 thou. t more than in 2011. The export value increased by 17.5%. Not
concentrated cream and milk shipment amounted to 142.5 thou. t, by 6.1 thou. t more,
whereas the value decreased by 20%. Concentrated milk and cream comprised 15%,
with their export value increased by 37%. Compared to 2011, the export of whey of
various forms was higher by 24 %. The amount of exported butter and other milk fats
increased by 1.7 times (5.1 thou. t was shipped), with their value increased by
1.5 times.

413
199
32
91
36
787
357
272
49
113
54
925
0 100 200 300 400 500 600 700 800 900 1000
0401 Milk and cream, not
concentrated
0402 Mik and cream,
concentrated
0403 Milk and cream,
fermented or acidified
0404 Whey
0405 Butter and other fats
derived frommilk
0406 Cheese and curd
2011
2012

Fig. 2.6. Exports of Lithuanian origin dairy products in 2011 and 2012, LTL million

The main export countries of dairy products are Russia, Italy, Germany, and
Poland. Exports to these countries accounted for 67% of the dairy products.
The exclusive harvest of cereals in 2012 ensured their high exports the value,
as compared to 2011, increased by 2.1 times, to LTL 1721 million, and accounted for
12.2% of the total export value of agricultural and food products. Export of cereals
totalled 2010 thou. t, of which 97% grown in Lithuania. In the structure of exports of
Lithuanian origin agricultural and food products in terms of value cereals comprised
18%. The key export partners were the Islamic Republic of Iran, Saudi Arabia, Latvia,

52
and Germany. Export of cereals into these countries accounted for 72% of the total
export of cereals.
Third in terms of export value is fruit with exports amounting to LTL 1229
million. Fruit of Lithuanian origin, however, accounted just for 6.1% (in 2011 6.6%).
Bilberries, gathered in Lithuania and frozen, made the largest part here. 22% of fruit and
berries of Lithuanian origin was exported to China, 18% to Germany, and 16% to
Sweden.
Vegetables exported in 2012 amounted to LTL 1267 million, comprising 8.7%
of the total exports, the share of their exports increased by 0.5 percentage point. Within
the reference period, export value increased by 33%, whereas Lithuanian origin
products accounted for 15%. 90% of Lithuanian origin vegetables consisted of
champignons cultivated in Lithuania (11.8 thou. t for LTL 57 million were exported),
locally gathered chanterelles (2.8 thou. t for LTL 54 million), other kinds of mushrooms
(0.5 thou. t for LTL 8.3 million), dried peas (16.6 thou. t for LTL 19 million), and
carrots (9.8 thou. t for LTL 9.1 million).
In 2012, 6.3% of the export value belonged to beverages and spirits, with export
value increase by 36%. Lithuanian origin products here, however, accounted just for
34% of the export value.
The export share of tobacco products comprised 6.3% of the total exports of
agricultural and food products, and all of them were manufactured in Lithuania.
Tobacco products accounted for 9.2% of the export value of Lithuanian origin products.
The export value of the residues and waste from the food industries and prepared
animal fodder was by 14% higher than in 2011. These products covered 5.4% of the
total exports. Products of Lithuanian origin accounted for 80% of the total export of the
above products and compared to 2011 their value increased by 6.5%. Products used for
animal fodder made the major part of exports here.
Harvest of oilseeds in 2012 was higher than usual. Compared to 2011, it
increased by 1.9 times. Seeds of Lithuanian origin accounted for 92%. Exports of
rapeseed cultivated in Lithuania were by 1.9 times higher, with the value increased by
2.1 times. 81% of rapeseed was exported to Germany, Belgium, Poland, Latvia, and the
Netherlands.
In comparison with 2011, export of meat in 2012 increased by 8.7% and
accounted for 5.0% of the total exports of agricultural and food products. 85% of the
exported meat was of Lithuanian origin. 46% of the export value belonged to bovine
meat, 34% to poultry meat, and 11% to meat of swine.
Meat of bovine animals of Lithuanian origin comprised the major part of exports
25.0 thou. t, with its value LTL 333 million (amount reduced by 1.2%, value
increased by 4.0%). Average export price for fresh or chilled bovine meat increased
from 12678 to 13264 LTL/t (4.6%), frozen from 12214 to 13653 LTL/t (11.8%).
Bovine meat was exported to 22 countries. 80% of bovine meat was shipped into
Russia, Italy, the Netherlands, and Sweden.
Export of Lithuanian poultry meat in 2012 was by 19% higher, the export value
increased by 20%. 95% of the exported Lithuanian poultry meat consisted of chicken.
The average Lithuanian poultry meat export price changed slightly increased from
6810 to 6857 Lt/t. Poultry meat was exported to 26 countries, 80% of which was
shipped into the Netherlands, Latvia, the United Kingdom, Estonia, and France.

53
Export of pork was by 11% higher than in 2011, amounting to LTL 82.2 million,
with the average export price increase from 7657 to 8427 LTL/t. The export share of
Lithuanian pork was 44%. In 2012 pork was exported to 16 countries, 78% to Latvia,
Russia, and Estonia.
Dynamics of exports of Lithuanian origin meat in 20082012 is given in Fig. 2.7.

332,8
221,3
18,2
260,2
239,2
260,4
319,9
21,2
31,5
38,0
25,1
36,8
100,7
121,0
149,2
185,1
12,8
6,4
6,7
41,0
0
50
100
150
200
250
300
350
2008 2009 2010 2011 2012
Meat of bovine animals Meat of swine
Poultry meat Edible meat offal

Fig. 2.7. Dynamics of the export of Lithuanian origin meat in 20082012, LTL million

Exports of fish and crustaceans accounted for 5.0% of the total export value of
agricultural and food products. If compared to 2011, the value dropped by 2.3%.
Products of Lithuanian origin accounted for 83% of the total exports of fish and
crustaceans.
3.5% of the total exports of agricultural and food products consisted of
preparations of meat and fish. Compared to 2011, export increased by 25%. Part of
Lithuanian origin products accounted for 83%. Preparations of fish accounted for 70%
of the export value, preparations of meat for 30%. The major part of exports went to
Russia (15%), France (14%), Germany, Latvia (13% each), and Estonia (10%).
Various food products under CN Chapter 21 accounted for 3.4% of the export of
agricultural and food products. In 2012, as compared to 2011, their export increased by
15%. The share of Lithuanian origin products constituted 40%. Mainly were exported
such products under this Chapter as food additives, spread mixes, coffee extracts, ice-
cream, and various souces. The major part of these products was exported to Russia
(32%), Latvia (27%), and Estonia (14%).
In 2012 the harvest of sugar beet was good. Sugar export increased by 28%.
78% of exported sugar was of Lithuanian origin. Export of white sugar manufactured in
Lithuania amounted to 95.1 thou. t for LTL 171 million. 86% of white sugar was
exported to Latvia (56%), Russia (16%), and Estonia (14%).
Analysis of agricultural and food products exported in 2012 to the EU and third
countries revealed that export to the EU amounted to LTL 7852 million (54% of the
total export), to third countries for LTL 6780 million. 71% of the products exported to
third countries were those belonging to the Customs Union (Russia, Belarus, and

54
Kazakhstan). Compared to 2011, exports to the EU countries increased by 17%, to third
countries by 1.4 times. Products of Lithuanian origin accounted for 83% of exports to
the EU and, in comparison with 2011, increased by 17%, the share of exports to third
countries comprised 46%, and the value increased by 45%.

204
414
683
1124
182
214
92
714
259
745
137
423
264
217
233
290
312
631
568
321
774
149
1084
1306
1067
94
95
159
200
616
161
325
62
69
33
58
28
62
62
51
0 400 800 1200 1600 2000
01 Live animals
10 Cereals
12 Oil seeds; straw and fodder
plants
animal fodder
EU-27 Third countries

Fig. 2.8. Exports of agricultural and food products by country group
in 2012, LTL million


55
In 2012 products of Lithuanian origin accounted for 26% of exports to the
Customs Union countries. Compared to 2011, the value went up by 7%. Products of
non-Lithuanian origin were exported for LTL 3543 million, their exports increased by
nearly 1.4 times. The major part of exports to the Customs Union countries consisted of
Lithuanian origin products for LTL 552 million (including cheese and curd for LTL
501 million), meat and meat by-products for LTL 245 million. Exports to Russia
covered 90% of the total exports to the Customs Union countries, 8.0% went to Belarus
and 2.0% to Kazakhstan.
The most important export partners of agricultural and food products were
Russia, Latvia, Germany, Poland, Estonia, the Islamic Republic of Iran, and the
Netherlands. Export to the above countries accounted for 70% of the total export of
agricultural and food products.
Even though when making an analysis of the export structure of Lithuanian
origin products by country, a list of the main partners included a good number of the
same countries as in surveying by total export value, their order on the list has changed.
The largest portion of Lithuanian origin products were exported to Germany. Latvia
and Russia were not much behind. Poland, the Islamic Republic of Iran, the
Netherlands and Estonia were also listed as the main partners. Export to the said
countries accounted for 62% of the total export of Lithuanian origin products.
In 2012 Lithuania imported goods from 159 countries, agricultural and food
products were imported from 103 countries. Lithuanias imported agricultural and food
products amounted to LTL 11.2 billion, by 17% more than in 2011. Agricultural and
food products comprised 13% of the total imports of goods into Lithuania. Of the
twenty-four CN chapters, import of products under four chapters decreased, and import
of products under the remaining twenty chapters either increased or remained the same.
The highest increase, almost by 1.4 times, of imports was of live animals, by 1.3 times
of vegetables, plants, cut flowers and grain each, by 1.2 times each of various
beverages, fats and oils, fruit and nuts, preparations of cereals, flour, starch and bakery
confectionery, while oilseeds and fodder decreased by 5.9% and by 11% products of the
milling industry, malt and starches.
Within the reference period, as earlier, the major part of imports consisted of
fruit and nuts, their value comprising 15% of the total imports of agricultural and food
products. Plenty of vegetables, various beverages, fish and crustaceans, milk and dairy
products, eggs and honey, meat, tobacco and tobacco products, miscellaneous edible
preparations under CN Chapter 21 (extracts, food additives, and spreads) were
imported. The value of the above-mentioned products accounted for more than 67% of
the total imports of agricultural and food products (Fig. 2.9).
In 2012 edible vegetables were second by import value. Their import increased
by 32% and accounted for 11% of the total imports of agricultural and food products.
Import of champignons, paprika, chanterelles, and aubergines accounted for 37% (re-
exported 79 thou. t of 95% imported) of the import of products of this group, tomatoes
for 34% (re-exported 73 thou. t, 83%), various lettuces for 8.0% (re-exported 17 thou. t,
87%). The major part of vegetables was imported from the Netherlands (76%), Poland
(7.3%) and Spain (5.5%). If assessed by weight, 81% of the products under this chapter
were re-exported.


56
11%
22 Beverages, spirits
and vinegar and edible
meat offal
11%
8%
Other products
29%
04 Dairy produce;
birds eggs;
natural honey
6%
15 Animal or vegetable
fats and oils
4%
21 Miscellaneous edible
preparations
5%
24 Tobacco and
manufactured tobacco
substitutes
5%
02 Meat and
edible meat
offal
6%
15%

Fig. 2.9. Structure of the import of agricultural and food products in 2012

Various beverages were third in terms of import volume. Imports of beverages
increased by 24%, wine comprised 45% of the import value in this group, spirits 24%,
mineral and carbonated waters with sugar or sweetening matter and other flavours 10%,
and beer 8.0%. Wine was imported from 37 world countries, the share of imports from
France, Italy, and Spain comprised 78% of the total imported wine. Strong spirits were
mostly shipped from France, Germany, Latvia, the United Kingdom, Sweden, and
Russia (over 64%), mineral and carbonated waters with various flavours from Poland,
Latvia, Austria, and Hungary (over 66%), beer from Belarus, Latvia, Germany, Estonia,
the Netherlands, and Poland (over 75%).
In 2012 imports of fish and crustaceans in terms of value increased by 11%.
33 thou. t of fresh and chilled fish, 29 thou. t of fish fillet and other fish meat, 39 thou. t
of frozen fish was imported. Import prices for all fish within the reference period
changed slightly (average import price for fresh and chilled fish decreased by 9.0%,
from 13069 to 11949 LTL/t, prices for fish fillet and other fish meat increased by 6.0%
from 8354 to 8852 LTL/t. 30% of fish and crustaceans was imported from Sweden,
11% from each Norway and Germany, 6.1% from each Latvia and Kazakhstan, 4.1%
from China. Imports from these countries accounted for 69% of all imported fish and
crustaceans.
Imports of milk and dairy products, birds eggs and natural honey compared to
2011 increased by 13%. Eggs and honey constitute a small part of the value of this
chapter products (6.3%); egg import, as compared to 2011, increased by 48%, their
imports amounted to LTL 30 million. As every year, the major part of imports consisted
of raw milk, its share accounting for 61% of the total value of imported milk products.

57
Raw milk imports amounted to 381 thou. t (in 2011 295 thou. t). Its average price
dropped by 7.9% from 1145 to 1055 LTL/t. 77% of raw milk was imported from
Latvia, 33% from Estonia. Imports of cheeses and curd were quite considerable: in 2012
8.5 thou. t (in 2011 7.7 thou. t), import increased by 9.6%. 35% of cheeses and curd in
terms of value was imported from Poland, 21% from Latvia, 18% from Germany, and
12% from Estonia.

97
579
805
624
92
131
954
1435
348
222
104
160
18
1,7
410
195
318
248
253
242
457
1006
434
449
132
642
895
710
103
166
1260
1741
382
286
93
150
17
1,6
505
215
310
284
296
271
513
1257
498
516
0 400 800 1200 1600 2000
01 Live animals
10 Cereals
plants
animal fodder
2011
2012

Fig. 2.10. Import of agricultural and food products in 2011 and 2012, LTL million


58
Imports from the EU constitute the largest share of agricultural and food product
import 84% (LTL 9449 million). The share of the old EU Member States (EU-15), if
compared to 2011, increased by 2.6 percentage points, making 53% of the products
imported from the EU.

5951
3498
1175
4825
4147
3077
3462
2423
2631
3280
3262
620
458
312
319
306
1117
888 830
1110
0
1000
2000
3000
4000
5000
6000
7000
2008 2009 2010 2011 2012
EU-15 EU-12 Russia, Belarus, Kazakhstan Other countries

Fig. 2.11. Dynamics of the import of agricultural and food products by country
group in 20082012, LTL million

In 2012 imports of agricultural and food products from the countries of all
groups exceeded the 2008 level. Volumes of imports from Russia, Belarus and
Kazakhstan (Customs Union) and other third countries in 20082012 got changed in a
similar way, no distinct changes were seen in 2009, whereas the volumes of imports
from the EU dropped significantly, even though they exceeded the pre-crisis level
already in 2010 from EU-15 and in 2011 from EU-12.
In 2012, with the Customs Union starting its operation, imports from Russia,
Belarus and Kazakhstan were by 2 times higher than in 2008, and compared to 2011
increased by 35%. In 2012 imports from these countries accounted for 65% of the
imports of agricultural and food products from third countries, imports from other third
countries 35%.
In 2012, in comparison with 2011, imports according to all four CN product
sections increased. Imports of prepared foodstuffs, beverages and tobacco (CN Section
IV, Chapters 1624) increased by 16%, fats and oils (Section III, Chapter 15) by 23%,
vegetable products (CN Section II, Chapters 0614) by 21% and live animals and
animal products (CN Section I, Chapters 0105) by 13%.


59

3601
3372
2197
410
4160
4097
2482
505
0
1000
2000
3000
4000
5000
Prepared foodstuffs,
beverages, tobacco
Vegetable products Live animals, animal
products
Fats and oils
2011
2012

Fig. 2.12. Import of agricultural and food products by CN section
in 2011 and 2012, LTL million
Source: Data of Statistics Lithuania

The value of imports from the Netherlands, Poland, Latvia, and Germany
comprised nearly 53% of the total value of imported agricultural and food products.

3035
350
447
469
479
489
1028
1228
1465
2253
2663
249
318
361
426
421
919
1094
1363
1766
0 500 1000 1500 2000 2500 3000 3500
Other countries
Russia
France
Spain
Estonia
Italy
Germany
Latvia
Poland
Netherlands
2011
2012

Fig. 2.13. Import of agricultural and food products by country
in 2011 and 2012, LTL million

60
Analysis of foreign trade in agricultural and food products showed the surplus of
trade in products under CN thirteen chapters. The highest positive balance of trade stood
for trade in grain, CN Chapter 04 products (milk and dairy products, eggs, and honey),
oilseeds and fodder, tobacco and tobacco products, meat and fish products, residues and
waste from the food industries and prepared animal fodder. The highest negative balance
of trade was noted for fats and oils, various beverages, coffee and tea, fruit and nuts.

637
1028
239
440
260
260
220
154
17
97
-37
11
-29
-12
-31
-70
-100
-53
-208
-223
-325
-280
1495
1188
624
377
294
294
224
133
95
93
49
7
3
-5
-13
-23
-70
-108
-160
-222
-228
-329
-336
-3
-2
-1
-800 -400 0 400 800 1200 1600 2000
10 Cereals
animal fodder
01 Live animals
plants
2011
2012

Fig. 2.14. Import of agricultural and food products in 2011 and 2012, LTL million

The negative balance of trade in sugar and sugar confectionery, vegetables in
2011 turned into positive in 2012. The surplus of trade in cereals, oilseeds and fodder
increased considerably, by 2.3 times. The negative balance of trade in fish increased by
3 times, since fish export decreased by 2.4% and import increased by 11.2%.

61
The balance of trade with the EU countries like in 2011 was negative, deficit
expanded by 2.6% from LTL 1269 to 1597 million. The surplus of trade with third
countries within the reference period increased by more than 1.5 times from LTL
3219 to 4985 million.
The highest surplus was in trade with Russia (LTL 3926 million), Iraq (LTL 684
million), Latvia (LTL 529 million), the highest deficit in trade with the Netherlands
(LTL 1664 million), Poland (LTL 536 million), and Spain (LTL 309 million).
The foreign trade turnover in 2010 of agricultural and food products after the fall
in 2009 started augmenting again. In 2012, if compared to 2009, the turnover increased
by 77% and comprised LTL 25.9 billion (Fig. 2.15). Nevertheless, the total foreign
trade turnover of Lithuania increased by 93%, therefore, the share of the turnover of
agricultural and food products dropped from 17.0% to 15.6%.

25,9
21,1
17,7
14,6
17,0
13,2
17,0
15,4
14,2
15,6
0
5
10
15
20
25
30
35
40
2008 2009 2010 2011 2012
L
T
L

b
i
l
l
.
0
5
10
15
20
%
Turnover, LTL billion Share, %

Fig. 2.15. Turnover of foreign trade of agricultural and food products and its
share in total Lithuanias foreign trade in 20082012

The highest turnover was in trade with Russia LTL 4667 million (18% of the
total trade turnover of agricultural and food products in 2012), Latvia LTL 2986
million (12%), the Netherlands LTL 2843 million (11%), Poland LTL 2394 million
(9.3%), Germany LTL 2322 million (8.9%). The turnover of trade with the above
countries comprised 59% of the total trade turnover of agricultural and food products.
Tendencies of foreign trade in agricultural and foreign products in Lithuania like
in other countries depend on global international trade tendencies, impacting the
consumer markets and business environment. Due to globalization processes, the
importance of trade for global economies will expand still more. Faster transport
operations, possibility for easier communication and Internet development are
stimulating the trade. International, newly signed bilateral and multilateral agreements,
which liberalize the flows of goods curtail or completely eliminate tariff and non-tariff
barriers.


62

3. Changes in production of agricultural and food
products

3.1. Cereals

Grain crop farming in Lithuania has become more popular. Good purchase
prices for grain and lower, as compared to livestock-breeding, labour input are the main
advantages of crop farming development. In the general structure of agricultural
production the share of crop farming during the period of 20082012 increased by
6.4 percentage points, and that of cereals even by 12.5 percentage points. In 2012 the
record harvest of grain (4.6 million t) was not a limit. Good climatic conditions, the
increased areas of winter crops guaranteed the additional revenue of LTL 1 billion to the
farmers in 2012. The high purchase prices for grain are predicted by global stock
exchanges, having a direct impact on our market as well.

Cultivation. Within the period of 20082012 the area under grain crops
increased just by 14.4%, whereas the structure got changed substantially. Areas under
winter cereals the yielding capacity thereof is higher increased by 28.3% and wheat
even by 50.6%.
Areas under grain crops in 2012 in Lithuania, as compared to 2008, increased by
14.6% (Fig. 2.16).

1058,7
1151,2
1061,7
1110,1
1212,9
3,9
3,0
2,7
3,4
2,9
800
900
1000
1100
1200
1300
1400
2008 2009 2010 2011 2012
t
h
o
u
.

h
a
0
1
2
3
4
t
/
h
a
Area, thou. ha Yield, t/ha

Fig. 2.16. Crop area and yield of grain crops in 20082012

Areas under wheat within the said period expanded by 13.1%, triticale by
23.8%, whereas under barley dropped by 13.9%. Areas under pulses decreased by 5.6%.
In 2012 the largest portion of areas under cereals was taken by wheat 54%, barley
19%, triticale 10%, oats 6%, and rye 5%.

63
Spring cereals in 2012 accounted for 47% of the total areas under grain crops,
the largest portion belonged to spring barley. In 2012 it covered the area of 212.3 thou.
ha.
In 2012, as much as 83% of all grain crops was cultivated in farmers farms
(999 thou. ha), the remaining part by agricultural companies and enterprises (214 thou.
ha). Compared to 2011, areas under grain crops in farmers farms increased by 7.4%,
and in agricultural companies and enterprises by 12.1%.
In 2012 the hydrometeorological conditions both in winter and in summer were
quite favourable for crop development. Therefore, the yield of cereals that year was
much higher than in 2011 (Table 2.7). Over the period of 20082012 the lowest yield
was observed in the years 2010 and 2011.

Table 2.7. Average yield of grain crops in 2008201, tonnes per hectare
Kind of grain crops 2008 2009 2010 n2011 2012
Change 2012,
compared to 2008,
%
Grain crops 3,29 3,38 2,69 2,98 3,94 19,8
cereals 3,35 3,45 2,75 3,03 4,02 20,0
winter cereals 4,14 3,89 3,04 3,03 4,73 14,3
wheat 4,76 4,40 3,40 3,32 5,17 8,6
triticale 3,27 3,16 2,34 2,54 3,82 16,8
rye 2,76 2,53 1,76 2,02 2,81 1,8
barley 3,94 3,83 2,50 2,92 4,42 12,2
spring cereals 2,69 2,87 2,44 3,03 3,27 21,6
wheat 3,01 3,41 3,07 3,47 3,89 29,2
barley 2,88 3,03 2,36 3,01 3,38 17,4
triticale 2,33 2,73 2,00 2,41 2,91 24,9
oat 2,07 2,23 1,53 2,03 2,31 11,6
buckwheat 0,76 0,67 0,74 0,96 0,90 18,4
mixed cereals 1,91 2,01 1,68 1,98 2,25 17,8
grain maize 4,24 4,33 6,66 7,49 6,10 43,9
other cereals 0,73 0,55 1,51 2,00 2,56 3,5 k.
dried pulses grain 1,70 1,80 1,36 1,72 1,89 11,2

The yield of cereals in Lithuania in 2012, as compared to 2011, increased by
32.7%. The highest increase was achieved in the yield of winter wheat 55.7%, winter
triticale 50.4%, and winter barley 49.8%.
Even though the national producers of cereals reached the highest yield of grain
in 2012, they have not exceeded the average in the EU countries so far. For example, in
2012 the average yield of wheat (4.5 t/ha) was lower than the EU average (5.3 t/ha) in
2011.

64
In 2012 in Lithuania the harvest of grain amounted to 4736.5 thou. t or by 1433
thou. t (43.3%) more than in 2011 (Table 2.8).

Table 2.8. Average harvest of grain crops in 20082012, thousand tonnes
Kind of grain crops 2008 2009 2010 2011 2012
Change 2012,
compared to
2008, %
Grain crops 3484 3892 2867 3304 4737 35,9
cereals 3422 3806 2797 3226 4657 36,0
winter cereals 1921 2440 1592 1192 2810 46,3
wheat 1381 1749 1250 912 2257 63,4
triticale 286 394 218 187 370 29,4
rye 205 208 87 85 155 24,4
barley 49 89 37 8 28 42,9
spring cereals 1501 1366 1205 2034 1847 23,1
wheat 341 351 460 957 742 117,6
barley 922 770 513 752 714 22,6
triticale 25 31 41 50 65 160,0
oat 141 143 94 128 164 16,3
buckwheat 21 15 14 26 31 47,6
mixed cereals 19 33 35 47 50 163,2
grain maize 32 24 47 72 79 146,9
other cereals 0,2 0,1 1 1 2 10,0 k
dried pulses grain 62 86 70 78 80 29,3

The harvest of cereals in 2012, compared to 2011, increased by 44.4%. Harvest
increase resulted from the higher yield and the larger area under crops.
In 2012 the harvest of winter crops was by 46.3% higher if compared to 2008.
The yield of spring cereals was by 23.1% higher.

Grain procurement in Lithuania. In 2012 in Lithuania cereal grains purchased
from the farmers was by 86% more than in 2011 (Table 2.9). Purchase of Class 2 food
wheat and triticale increased most substantially. Part of the purchased grain was
exported by the purchasers.
Grain procurement prices in 2012 were higher than in the period of 20082011.
Their level was conditioned by the global prices which due to the grain shortage in the
USA, Australia, Russia, the EU and other grain exporting countries were increased by
2030% for the 20122013 harvest. In 2012 the purchase prices for triticale and wheat
got increased most considerably, and those for oats and buckwheat went on reducing.


65
Table 2.9. Purchase of grains in 20082012, thousand tonnes
Kind of grain 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Total 2398 2544 1916 1661 3092 28,9
wheat 1445 1717 1366 1195 2356 63,0
food wheat, class I 211 635 613 497 686 225,1
food wheat, class II 710 700 256 195 852 20,0
feed wheat 524 382 497 503 818 56,1
rye 114 115 51 25 79 30,7
food rye, class I 65 78 17 12 35 46,2
barley 591 439 372 320 337 43,0
food barley 43 34 32 40 51 18,6
malt barley 78 60 68 56 72 7,7
feed barley 470 345 272 224 214 54,5
oats 28 16 12 15 20 28,6
grikiai / buckwheat 3 3 2 9 15 400,0
kvietrugiai / triticale 184 252 110 73 249 35,3
kukurzai / maize 9 2 3 11 26 188,9
Sources: Data of Statistics Lithuania and Agricultural and Food Market Information System (2012).

Grain procurement prices, compared to the beginning of the year, changed
several times from the new harvest in 2012 and at the end of the year.

Table 2.10. Average purchase price of grains in 20082012, LTL per tonne
Kind of grain 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Total 561 362 517 657 709 26,4
wheat 595 396 544 671 719 20,8
food wheat 649 400 559 711 733 12,9
rye 480 248 391 605 606 26,3
barley 518 317 446 617 691 33,4
malt barley 659 394 503 718 780 18,4
feed barley 508 305 433 597 674 32,7
oats 446 204 307 549 555 24,4
buckwheat 663 564 1753 1205 1026 54,8
triticale 440 269 471 557 648 47,3
maize 860 403 624 624 707 17,8
Sources: Data of Statistics Lithuania and Agricultural and Food Market Information System (2012).


66
Processing. In 2012 the national grain processing companies produced by 30%
more groats whereas production of flour (1.9%), fresh bread (3.8%) and pastry and
bakery confectionery (4.3%) was lower (Table 2.11). The decreasing purchasing power
of the population during crisis had a direct impact on the changes in trading these
products within the reference period (20092011).

Table 2.11. Production of grain products in 20082012, thousand tonnes
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Flour 249,2 269,0 296,9 334,1 327,9 31,6
Cereal groats 23,5 22,4 19,4 14,2 18,5 21,3
Fresh bread 142,0 134,3 134,1 126,1 121,3 14,6
rye bread 60,9 59,8 59,9 59,0 55,8 9,4
other bread 81,1 74,5 74,2 67,1 65,5 19,2
Pastry and confectionery 26,9 24,1 23,5 23,4 22,4 16,7

Average wholesale prices of the largest part of grain products in 2012, compared
to 2011, have dropped (flour, wheat, buckwheat groats), whereas wholesale prices for
semolina, bread and confectionery were increasing (Table 2.12).

Table 2.12. Average wholesale prices of grain products in 20082012, LTL per tonne
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Wheat flour 1162 937 970 1186 1101 5,2
Rye flour 1014 698 704 1014 966 4,7
Wheat groats 1114 741 868 1282 1115 0
Semolina 1170 813 850 1319 1356 15,9
Buckwheat groats 2194 1775 2786 4178 2730 24,4
Fresh bread 3076 2992 2739 3055 3161 2,8
rye bread 2881 2886 2658 3010 3123 8,4
other bread 3230 3082 2806 3094 3193 1,1
Confectionery 8790 8300 7660 8164 8864 0,8
Source: Data of Statistics Lithuania .

Changes in retail prices varied. Over the reference period, prices for buckwheat
and bread increased mostly, and the lowest price increase was for flour and pasta
(Table 2.13).


67
Table 2.13. Average retail prices of grain products in 20082012, LTL per tonne
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Wheat flour, best quality 2,38 2,37 2,37 2,60 2,47 3,8
Rye bread 4,16 4,41 4,39 4,89 5,02 20,7
White bread made from
wheat flour
4,80 5,03 5,03 5,47 5,45 13,5
Buckwheat groats n. d. 3,47 5,26 9,04 6,37 83,6*
Pasta n. d. 2,30 2,35 2,43 2,43 6,5*
* Compared to 2009.
Source Data of Statistics Lithuania.

Balance. Grain harvest yielded during the period of 20082012 was sufficient to
satisfy national needs (Table 2.14). This is evidenced by the self-sufficiency index which in
2012 was highest within the reference period. The major proportion of grain for domestic
uses was consumed in livestock-breeding. In 20082012, 58% of grain produced on
Lithuanian farms was used for feedstuffs.

Table 2.14. Balances of grain and grain products in 20082012, thousand tonnes
Indicators 2008 2009 2010 2011 2012*
Change 2012,
compared to 2008,
%
Beginning stocks 1083,7 1300,0 1272,5 866,1 1255,1 15,8
Production 3484,2 3892,3 2867,2 3303,9 4736,5 35,9
Import 415,3 199,3 294,2 408,9 539,1 29,8
Total resources 4983,2 5391,6 4433,9 4478,9 6530,7 31,1
Export 1839,8 2067,6 1708,6 1475,0 2411,8 31,1
Domestic uses 1843,4 2051,5 1859,2 1848,8 1903,0 3,2
seeds 214,0 230,6 221,4 229,2 220,0 2,8
animal fodder 1019,4 1194,4 980,8 1036,1 1100,0 7,9
losses 52,2 57,1 52,8 51,5 53,0 1,5
industrial uses 175,7 178,8 242,7 279,2 200,0 13,8
human consumption 382,1 390,6 361,5 352,8 330,0 13,6
Per capita consumption, kg 114 117 110 109 110 3,5
Ending stocks 1300,0 1272,5 866,1 1255,1 2215,9 70,5
Self-sufficiency level, % 189 190 154 179 249 59,9**
* LIAE calculations.
** percentage point.
Source: Agriculture in Lithuania 2011 Vilnius: 2011. Department of Statistics 2012. ISSN-2029-3658.

Consumption of grain and grain products was almost steady in Lithuania
during 20082012 the domestic uses increased by 3.2%. Their per capita consumption
in 2012, in comparison with 2008, was by 3.5% lower.


68
Foreign trade in grain and grain products. With a record harvest yielded, it
was expected to export the surplus until the end of the year, but this has not happened.
Farmers while anticipating the higher export prices stored their surplus grain in
granaries and were in no hurry to sell them. In 2012, compared to 2011, export of cereal
grains increased by 36.3%, and import dropped by 12.1% (Table 2.15). Within the
mentioned period their export to the EU countries increased by 47.2%, and in 2012
constituted 40.1% of the total export of cereal grains. Exports of cereal grains to third
countries in 2012, as compared to 2010, were up by almost 3 times. Exports of the
products of the milling industry within the reference period dropped by 2.4%, and
imports by 10.8%.

Table 2.15. Exports of cereal grains and grain products in 20082012, thousand tonnes
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Cereal grains 1608,3 1778,8 1379,5 1094,9 2009,8 25,0
of which wheat 1129,9 1275,6 1123,1 807,7 1672,1 48,0
rye 60,1 118,2 20,8 26,6 80,5 33,9
barley 316,1 189,0 154,0 204,3 100,1 68,3
Milling products 141,9 147,5 159,8 185,1 190,2 34,0
of which wheat flour 6,8 11,3 15,3 9,8 11,1 63,2
rye flour 1,1 0,7 0,7 1,7 4,2 281,8
cereal groats 3,1 4,2 3,9 2,8 2,7 12,9

In 2012 the largest proportion of grain (wheat) was sold to Iran (39%) and Saudi
Arabia (14%). Exports of rye were highest to Poland (38.1%) and Germany (25.0%),
and barley to Latvia (59.4%). Most of wheat flour was sold to Latvia (48.5%), and
cereal groats also to Latvia (57.8%).
Imports of cereal grains in 2012 were by 5.5 lower than exports (Table 2.16).
The major part of cereals was imported from Latvia, Russia and Ukraine.

Table 2.16. Imports of cereal grains and grain products in 20082012, thousand tonnes
Products 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Cereal grains 331,1 92,3 172,7 275,4 359,4 8,5
of which wheat 115,4 39,5 95,3 64,1 160,4 39,0
rye 2,8 5,4 23,9 41,3 64,5 23*
barley 37,6 6,0 8,8 68,1 34,5 8,2
Milling products 42,0 48,9 50,0 64,8 53,7 27,9
of which wheat flour 5,4 16,4 26,2 28,4 21,9 4*
rye flour 17,2 13,3 3,2 4,9 10,3 40,1
cereal groats 1,5 2,7 6,9 9,8 3,4 126,7
* Times.

69

Grain farming in Lithuania holds strong positions. This sector, however,
generates the most minimum value added in agriculture more than a half of grain is
exported to other countries as a raw material for processing. As an alternative could be
the development of pig-breeding in Lithuania, where value added created per tonne of
grain could be 23 times higher.

3. 2. Milk

The Lithuanian dairy sector after the global economic crisis of 20082009
started reviving in 20112012, though at a slow pace. Milk procurement in 2012 was
still by 1.1% lower than in 2008. Small dairy farms were further rapidly declining as
their elderly owners were not able to upkeep their farms, while others could not survive
because of low procurement prices they were paid. Larger dairy farms, though receiving
a higher price, did not have too much stimulus for their growth to compensate the
decline of small dairy farms. The average annual milk procurement price in Lithuania in
20082009 was the lowest in the EU countries, and since 2010 it has become higher
only as compared to the price paid in Romania. Therefore, raw milk was in shortage in
Lithuania. Milk processing companies attempted to solve the problem of raw milk
shortage by importing still higher volumes of milk from neighbouring countries.
Nevertheless, they did not raise the milk procurement prices in Lithuania to the level to
encourage the expansion of milk production.

Milk production and procurement. In 2012 milk yield amounted to 1820 thou.
t, of which 75% was purchased for processing (Table 2.17). In comparison with 2011,
milk production in 2012 was up by 1.9%, but, compared to 2008, was down by 3.4%.
Milk procurement during 2012 increased by 3.2%, whereas within the five years
dropped by 1.1%. The global economic crisis had a big impact on milk production and
procurement volumes: in 2009, as compared to 2008, milk production slumped by 5%
and procurement by 7.4%. Until 2012 neither milk production nor milk procurement has
attained the pre-crisis level.

Table 2.17. Milk production and purchase in 20082012, thousand tonnes
Indicators 2008 2009 2010 2011 2012
2012,
compared to
2008, %
Milk production 1883,8 1791,0 1736,5 1786,4 1820,0 97
Milk purchase
natural fatness 1375,6 1274,2 1278,3 1317,4 1359,9* 99
basic fatness** 1660,8 1534,3 1540,4 1587,6 1638,0 99
* 4,15 % milk fat, 3,26 % protein.
** 3,4 % milk fat, 3,0 % protein.
Sources: Agriculture in Lithuania 2011. Vilnius: Department of Statistics, 2012. ISSN-2029-3658.
Agricultural and Food Market Information System. Milk sector, domestic market. Agricultural Information and Rural
Business Centre. [interactive], [reviewed on 22 March 2013]. Access through Internet <http://www.vic.lt/?mid=348&id=11599>.


70
Nearly all the milk yield is received by milking cows. Goat milk in 2011 just
accounted for 0.2% and since 2008 has not almost changed by physical weight and in
relative terms.
Over 80% of milk is produced in farmers farms and family farms, though the
relative weight of agricultural companies and enterprises has been increasing at a slow pace.
In 2008 the latter produced 15.4% of milk and in 2011 16.1%. In fact, compared to 2010,
the share of agricultural companies and enterprises decreased by 0.1 percentage point.
The balance of trade in raw milk in Lithuania is negative, and the gap between
imports and exports is still more increasing, as the milk processing companies are
lacking raw milk purchased in Lithuania. In 2008 raw milk imports excelled exports by
189.9 thou. t, and in 2012 by 301.8 thou. t. Imports of raw milk in 2012 reached
380.6 thou. t and compared to 2011 increased by 29%. The key import countries
remained traditional Latvia (69% of the imported milk) and Estonia (31%). The
average price for the imported raw milk in 2012 was 1055 LTL/t. During 2012 raw milk
exports amounted to 78.8 thou. t. In comparison with 2011 raw milk exports increased
by 3.3%, its export geography having changed as well. In 2008 raw milk exports to
Poland stood at 71%, to Latvia 29%, and in 2012, 90% was exported to Poland, 9% to
Latvia, 1% to Estonia, and an insignificant part to the Russian Federation. The average
exported raw milk price was 1111 LTL/t. Compared to 2008, the amount of raw milk
exported in 2012 was by 21.5 times higher.
Since 2008 the purchased milk quality and composition indicators have changed
slightly. In 2008 96.4% and in 2012 96.3% of the total purchased milk satisfied the EU
veterinary and hygiene requirements. The average fatness of the purchased milk in 2008
and in 2012 was 4.15%, and protein content was 3.28% in 2008 and 3.26% in 2012.
As a result of the global economic crisis, milk procurement prices stopped rising at
the second half of 2008. In 2009, compared to 2008, the purchase price for milk of basic
indicators reduced by 28%. Later it began to go up and in 2011 reached 818 LTL/t,
whereas in 2012 decreased again by 8.9%. In 2012, if compared to 2008, the average
annual purchase price of milk of basic indicators increased just by 4.3% to 745 LTL/t
(Fig. 2.17).
1298
1220
1104
786
1186
745
818
717
512
714
0
400
800
1200
1600
2000
2008 2009 2010 2011 2012
m
l
n
.

L
t

/

L
T
L

m
i
l
l
.
0
200
400
600
800
1000
L
t
/
t
Pardavimo pajamos, mln. Lt / Income, LTL mill.
Supirkimo kaina, Lt/t / Purchase price, LTL/t
Fig. 2.17. Purchase price and income from sales of milk of basic indicators in 20082012
Sources: Agriculture in Lithuania 2011. Vilnius: Department of Statistics, 2012. ISSN-2029-3658.
Agricultural and Food Market Information System. Milk sector, domestic market. Agricultural Information and Rural
Business Centre. [interactive], [reviewed on 22 March 2013]. Access through Internet
<http://www.vic.lt/?mid=348&id=11599>.

71
Fluctuations of milk purchase prices were mostly affected by the global economic
crisis and the relevant changes in the global demand for milk products with the
respectively increased or decreased export prices for milk products. Similar tendencies of
variation in milk purchase prices were alike as in other EU countries, whereas in
Lithuania the range of fluctuations was more abrupt and more profound. In 2010 the
annual average milk purchase price in Lithuania jumped up from the lowest position in
the EU since the years of Lithuanias accession to the EU, leaving Romania behind. In
2012 the situation did not change (Fig. 2.18), even though in separate winter months milk
prices in Lithuania were higher than in Latvia or Poland. One of the main reasons of the
average low milk purchase price in Lithuania is the prevalence of small milk producers
who are paid a much lower price than large-scale milk producers and the apparently lower
price paid during the summer season due to the increased milk volumes.
The average Lithuanian dairy farm is among the smallest in the EU countries. In
2010 the number of milking cows per farm was 4.1, making 30% of the average in the
EU. Smaller average dairy farms were only in Romania (1.8 cows) and in Bulgaria
(3.9 cows). Milk production farms, however, are becoming larger in Lithuania. In 2012,
as compared to 2008, the average dairy farm increased by 29% to 4.5 cows.

1093
1189
1038
988
954
897
859
500
700
900
1100
1300
Romania Lithuania Latvia Poland Estonia EU-10 EU-15

Fig. 2.18. Milk (natural fatness) purchase price in Lithuania and selected other
EU countries in 2012, LTL per tonne
Sources: Agriculture EUROSTAT [interactive], [reviewed on 24 April 2013].Access through Internet:
<http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tag00070&plugin=1>;
EU milk prices GD Agri. DairyCo [interactive], [reviewed on 24 April 2013]. Access through Internet:
<http://www.dairyco.org.uk/resources-library/market-information/milk-prices-contracts/eu-milk-prices-dg-agri/ >.

The process of enlargement of an average dairy farm takes place to a great
extent alongside with the decline of small farms. From 2008 to the end of 2012 the
number of farmers keeping 12 cows reduced by 31673, or 38%, those keeping 39
cows decreased by 24%, and keeping 1019 cows by 20%. Simultaneously, the number
of farms with 30 and more cows increased by 53, or by 3.8%, and the number of cows
kept here by 4.1% (Table 2.18). In Lithuania small-scale farms are still prevalent. J ust
7.3% of the national milk producers are keeping 10 and more cows.
Due to the dominating position of small farms in the country, the average
productivity per cow is considerably lower than the average in the EU. In 2011 it
reached 5026 kg of milk, or 75% of the EU average. The productivity of cows,
however, during the reference period has been increasing: in 2012, as compared to
2008, the milk yield per cow increased by 9.4%. The average milk yield of cows under
control during the control period of 20112012 reached 6703 kg by 4.9% more than in

72
20102011 and by 13.6% more than in 20072008. During the control period of
20112012, 43% of all kept cows were under control in the country.

Table 2.18. Dairy farms by number of cows in 2008 and 2012 (at the end of the year)
Number of cows per
farm
2008 2012
number of
farms
number of cows,
thou.
number of
farms
number of cows,
thou.
12 82359 101,6 50686 63,7
39 19536 89,3 14752 68,2
1019 3420 45,2 2732 37,0
2029 1037 24,6 971 23,1
3049 769 28,6 782 29,4
5099 410 27,3 445 30,2
>=100 226 63,5 231 64,7
Total 107757 380,2 70599 316,4
Average 3,5 4,5
Sources: Agricultural Information and Rural Business Centre [interactive], [reviewed on 24 April 2013] Access through Internet:
<http://www.vic.lt/uploads/file/06_ukiu130101_pagal_gyvas_karvs11.pdf>;
<http://www.vic.lt/uploads/file/16_06_ukiu090101_pagal_gyvas_karvs11.pdf>.

From 2008 to the end of 2012 the number of dairy cows decreased by
83.7 thousand (Fig. 2.19). Their number was consistently decreasing throughout the
whole reference period. In 2012, as compared to 2011, the number of cows reduced by
11%. This was the most significant decrease in the number of cows within the reference
period. Within the same period the milk yield per cow went on increasing. In 2012 it
was by 9.4% higher than in 2008.

311,0
394,7
359,8
374,6
349,5
5227
5026
4901
4811
4778
0
300
600
900
2008 2009 2010 2011 2012
t
h
o
u
.

3500
4000
4500
5000
5500
k
g
Number of cows, thou. Milk yield per cow, kg

Fig. 2.19. Number of cows and milk yield per cow in 20082012 (at the end of the year)
Source: Agriculture in Lithuania 2011. Vilnius: Department of Statistics, 2012. ISSN 2029-3658.

73

Manufacturing of dairy products. The dominant position in the milk
processing sector of Lithuania belongs to the four groups of milk processing companies:
Rokikio sris AB, Pieno vaigds AB, emaitijos pienas AB and Vilkyki pienin
AB. These groups of companies in 2012 raised about 79% of the total income from sales
in the milk processing sector, by 6 percentage points more than in 2011. The said groups
of companies are also the main exporters of dairy products. Other milk processing
companies and their groups are smaller. Some of them, however, are also exporting the
major part of their output.
All Lithuanian milk processing companies and their subsidiaries have
implemented the EU sanitary and hygiene requirements for food production and are
entitled to export their products to the EU Member States. 13 milk processing companies
and their subsidiaries have licences for exporting their production to Russia, and 9 to
Belarus.
After the boost in 2007, the notably decreased global demand and prices for
milk products in 2008 and 2009 conditioned the reduction in the sales and export
volumes of the milk processing companies. In 20102012, with the global economies
reviving after the global crisis, the demand for dairy products was up again (Table
2.19). In 2012, as compared to 2011, sales of dairy products (including ice-cream,
lactose and casein) increased by 2.8%, of which export by 14%.

Table 2.19. Key indicators of the milk processing industry in 20082012
Indicators 2008 2009 2010 2011 2012
Number of milk processing enterprises & subsidiaries 33 32 31 31 31
Sales of dairy products, LTL mill. 2294,8 2043,3 2169,0 2736,6 2812,2
share in total production of foodstuffs, % 28 28 28 30 28
Export income, LTL mill. 1340,6 1154,4 1457,7 1697,9 1936,6
share in total income from sales, % 58 56 67 62 69
Sources: Production of Commodities 20082012. Vilnius:Department of Statistics. ISSN 1648-5777;
Data of the Department of Statistics [interactive], [reviewed on 6 May 2013]. Access through Internet:
<http://osp.stat.gov.lt/statistiniu-rodikliu-analize?id=2644&status=A>;
State Food and Veterinary Service [interactive], [reviewed on 24 April 2013].Access through Internet:
<http://vetlt1.vet.lt/vepras/>.

The key area in the specialization of the dairy industry in Lithuania is the
production of cheeses. These products also dominate in the structure of exports. The most
substantial part of dairy products was manufactured in 2008, when the global demand for
dairy products was highest, and the domestic market was not much affected by crisis and
was not so shrunk due to emigration. In 2012, in comparison with 2008, the production of
curd (21%), butter and other milk fats (18%) increased most of all. However, the
production of quite a large part of dairy products has not reached the production volumes
of the year 2008 (Table 2.20).


74
Table 2.20. Production of main dairy products in 20082012, thousand tonnes
Products 2008 2009 2010 2011 2012
2012, compared
to 2008, %
Drinking milk 105,0 99,5 94,0 102,6 100,3 96
Sour milk, kefir 35,9 34,8 35,7 33,9 35,6 99
Yoghurt 15,3 14,4 14,4 14,6 16,6 108
Sour cream & mixes 27,9 28,6 27,8 28,3 29,1 104
Curd 23,3 23,5 24,4 26,5 28,2 121
Butter and other milk fats 9,0 12,0 8,5 8,7 10,6 118
Fresh cheese 30,7 34,8 24,0 24,8 33,7 110
Unprocessed cheese 56,3 37,6 43,9 46,8 49,3 88
Dried milk and whey products 40,0 41,4 36,6 39,2 39,0 98
Ice cream, mill. l 25,1 21,1 24,5 18,1 23,8 95
Canned dairy products 29,8 21,0 25,0 21,5 22,8 77
Sources: Production of Commodities 20082012. Vilnius:Department of Statistics. ISSN 1648-5777.

Domestic market in dairy products. Per capita consumption of milk and dairy
products in milk equivalent in Lithuania during the period of 20082011 increased by
5.6%. Consumption of certain dairy products, excluding products manufactured on the
farms and consumed for their own needs and direct sales in 2012, as compared to 2008,
increased by 20138%, even though consumption of drinking milk by the population
reduced by 13% (Table 2.21).Within the said period prices for dairy products increased,
especially of products from milk fats, whereas wages in 2012 were just by 0.6% higher
than in 2008. The growth in the consumption in 2012 was due to the updated number of
the population according to the 2011 census of population which turned out to be lower
than that which was calculated in the previous years by using statistical methods.

Table 2.21. Changes in consumption of milk and dairy products and factors
influencing consumption in 20082012
Products 2008 2009 2010 2011 2012
2012,
compared to
2008, %
Per capita consumption of milk and dairy products, kg
Milk and dairy products (in milk equivalent) 268 289 262 283 n.d.
Cheese and curd* 14,3 13,6 14,1 14,8 17,4 122
Butter* 1,3 2,2 1,9 2,0 3,1 238
Sour milk products* 22,5 20,7 23,5 24,3 27,0 120
Drinking milk* 39,1 30,2 30,7 30,8 34,2 87
Purchasing power of average net wages and salaries per month
Butter, kg 87 93 78 81 71 82
Sour cream, 2030 % fat content, kg 206 317 276 253 177 86
Curd, 59% fat content, kg 131 153 148 130 134 102
Milk, 2,5% fat content, l 703 778 773 658 662 94

75
Products 2008 2009 2010 2011 2012
2012,
compared to
2008, %
Average retail price of milk and dairy products, Lt/kg
Butter 19,04 17,26 19,91 19,62 23,35 123
Milk, 2,5% fat content, LTL/l
2,35 2,06 2,01 2,42 2,51 107
Sour cream, 2030 % fat content 8,01 5,35 5,63 6,29 9,40 117
Curd, 59% fat content 12,59 10,50 10,53 12,25 12,44 99
* Own-produced and consumed products and direct sales excluded.
Sources: Production of Commodities 20082012. Vilnius:Department of Statistics. ISSN 1648-5777;
Economic and Social Development in Lithuania, Latvia and Estonia 20082012. Vilnius: Department of Statistics.
ISSN 2029-5936;
Agriculture in Lithuania 2011. Vilnius: Department of Statistics, 2012. ISSN 2029-3658;
Key Indicators of Economic and Social Development: Department of Statistics data [interactive], [reviewed on 7 May 2013].
Access through Internet <http://web.stat.gov.lt/lt/pages/view/?id=2621>; Department of Statistics data.

The major part of dairy products sold on the domestic market is manufactured in
Lithuania. Nevertheless, the share of imports has a tendency towards increasing. In 2008,
the imported dairy products accounted for 16% of the total dairy products sold on the
Lithuanian market (excluding raw milk imports), and in 2012 18%, even though in 2009
their amount dropped to 14%. Cheese and fermented and sour dairy products, ice-cream
are dominating in the structure of imports of dairy products. In 2012 the amount of
imported dairy products (including ice-cream, lactose and casein, with raw milk excluded)
totalled LTL 290.8 million, or by 45% more than in 2008. The total market of dairy
products constituted LTL 1.6 billion, and also including products with vegetable fats
LTL 1.7 billion (by 23% more than in 2008).
Wholesale prices for dairy products sold by Lithuanian producers on the
domestic market in December 2012 decreased by 2.4% as compared to December 2007.
Wholesale prices within the reference period were highest in J anuary 2008, but they
started decreasing already in the next month and reached the lowest level in September
2009 were by 21% lower than in December 2007. From September 2009 wholesale
prices for dairy products on the Lithuanian market went on increasing or stood at the
level reached and began decreasing slightly only after April 2012.

Export of dairy products. Balance of the Lithuanian foreign trade in milk and
dairy products in 20082012 was positive: in 2008 exports surpassed imports by LTL
934.1 thousand, and in 2012 by LTL 1244.6 thousand. The growth rate of imports,
however, excelled exports: within the period of 20082012 imports increased by 70%,
exports by 44%, though in 2012, compared to 2011, imports were up by 12%, and
exports by 14%.
In 20082009, during economic crisis, exports of milk and dairy products due to
the fallen prices and the volume were reducing, and from the year 2010 went on
increasing. In 2012 exports of dairy products (including ice-cream, lactose and casein)
amounted to LTL 1936.6 million. Cheese and curd accounted for about a half of the total
exports. In 2012, 14% of exports of dairy products consisted of not concentrated cream,
11% milk powder. A similar situation was also observed in the previous reference years.
In 2012, compared to 2008, export of almost all dairy products was increasing; most of all
fermented and acidified milk products and milk sugar (by 3.4 times each). Only exports of
condensed milk and casein decreased, the structure of exported cheese got changed
(Table 2.22).

76
Table 2.22. Exports of dairy products in 20082012, LTL million
CN
code
Products 2008 2009 2010 2011 2012
2012,
compared to
2008, %
0401 Milk & cream, not concentrated 180,2 177,5 291,3 416,2 360,8 200
0402 Milk & cream, concentrated 189,1 163,4 256,2 208,6 289,3 153
040210 Skimmed milk powder 83,0 66,5 151,2 136,2 202,0 243
040221 Whole milk powder 23,2 30,7 28,9 10,5 24,9 107
040291 Condensed milk without sugar 34,1 25,1 42,4 22,4 21,5 63
040299 Condensed milk with sugar 47,5 40,4 33,4 39,3 40,7 86
0403 Fermented or acidified milk & cream 15,7 15,2 16,6 36,8 52,7 336
040310 Yogurt 2,2 2,3 2,7 13,2 24,7 112
0404
Whey & products consisting of natural
milk constituents
63,7 61,0 83,2 95,2 115,1 181
0405
Butter & other fats & oils derived
from milk, dairy spreads
52,2 39,8 33,5 36,9 58,7 112
0406 Curd & cheese 782,8 647,9 716,0 813,4 951,4 122
040610 Fresh cheese & curd 269,7 252,9 293,7 333,1 433,9 161
040690 Other cheese 509,2 391,5 416,6 467,9 501,9 99
210500 Ice cream 31,5 34,4 42,3 46,3 54,7 174
350110 Casein 9,0 3,2 0,03 0,3 0,0 ...
170211-19Milk sugar 16,0 12,0 18,1 44,2 53,8 336

The main countries for exports of dairy products were the EU countries and
Russia. In 2012 most of the dairy products were exported to the EU countries 57% of
the total export, to Russia 30% (Fig. 2.20). In 2008 exports accounted for 60% and
34%, correspondingly. The share of exports to Russia is so high since here an
opportunity exists to sell Lithuanian cheeses under their own trademarks and for a
higher price than selling them in the EU countries as industrial cheeses. Cheese
comprised the major portion of dairy products exported to Russia (more than 80%).

Other
countries
13%
EU
57%
Russia
30%

Fig. 2.20. Structure of the export of dairy products by country group in 2012

77
Prices for exported dairy products in December 2012, as compared to December
2007, increased by 16%. Price variation tendencies during the reference period were
similar to those on the domestic market; just the price jumps or falls were much bigger.
In 2010 dairy product export prices were increasing especially rapidly: in December
2010, as compared to December 2009, they increased by 26%. Another leap of export
prices started at the second half of 2012. In December 2012, as compared to J uly, they
increased by 16%.

Market regulation measures. In Lithuania, like in the entire EU, common
market organizational measures for milk and dairy products as well as milk production
quota system are operating.
In 2004 the total amount of national milk production quota of 1647 thou. t was
approved for Lithuania: 1280 thou. t of sales for processing and 367 thou. t for direct
consumption. Since the quota period of 20062007 (the quota year starts on 1 April and
continues until 31 March of the following year) it has been increased by 57.9 thou. t,
from the quota year of 20082009 by 2% up to 1739 thou. t, and each subsequent year
being increased by 1%. The granted quota is sufficient and does not restrict the
commercial milk production (Table 2.23).

Table 2.23. Fulfilment of national milk production quota in 20072012, per cent
Quota year ota for processing Quota for direct consumption
20072008 85 54
20082009 84 56
20092010 76 61
20102011 77 58
20112012 79 54
Sources: National Paying Agency [interactive], [reviewed on 8 May2013]. Access through Internet:
http://www.nma.lt/index.php/parama/kvotos/pieno-kvotos/statistika/1498.

National direct payments for the quota milk sold in 2008 amounted to LTL
119.7 million, in 2009 to LTL 118.8 million. In 2010 LTL 117.4 million of direct
payments for the sold quota milk was paid, and EU payments to milk producers who
suffered from the dairy sector crisis amounted to LTL 10.6 million. In 2011 LTL
92.3 million of decoupled direct national payments for the quota milk was allocated and
paid to milk producers, and in 2012 LTL 93.3 million.
Of the Single Market organizational measures in the period of 20082012 the
major support for milk and dairy products was used in the crisis affected year 2009,
since the said measures are intended to support the milk sector after the emergence of
difficulties. Here export refund payments and intervention purchases have been used
most widely. Even though since J uly 2007 the EU refund payments for export to third
countries have been withdrawn, in 2008 the milk processing companies still received
LTL 3.8 million of compensations for the products exported in the previous years. In
2009 export compensations were resumed and dairy product exporters were paid LTL
17.55 million of export compensations, of which to Lithuanian companies LTL 13.95
million. In 2010 just LTL 3.4 million of export compensations was paid out, as due to
the increased prices compensations were withdrawn again. In 2011, LTL 0.05 million of
export compensations was paid, and in 2012 no compensations were paid.

78

In 2009 the milk processing companies for the first time took advantage of the
measure for butter and skimmed milk powder intervention purchases as prices for dairy
products on the foreign market have dropped considerably. Until then intervention
purchases have not been performed, since none of milk processing companies was
willing to sell their production to intervention warehouses. Purchases to intervention
warehouses consisted of 1.84 thou. t of butter and 10.34 thou. t of skimmed milk
powder. In 2010 12.18 thou. t of intervention dairy products, and in 2011 6.0 thou. t.
In 2009 support for private butter storage was also used. Private storage of 21 t
of butter was granted support.

Economic indicators. Over the period of 20082011 milk production at
specialized dairy farms was profitable; however, if not for the subsidies, losses would
have been suffered in separate years. According to the FADN data of the respondent
farms, the net profit at farmers farms, the main revenue thereof was income derived
from milk production and subsidies per LTL 1 of sales income, totaled 44.2% in 2008
(subsidies exclusive 9.2% of losses). In 2011 the profitability dropped to 31.4%,
subsidies inclusive, though without subsidies it was still positive 2.5%.
Milk production at agricultural companies and enterprises was profitable, except
for the year 2009, when losses suffered amounted to 0.4% (Fig. 2.21). Milk production
in agricultural companies and enterprises is among the more profitable branches of the
economy. The gap from the average profitability of agricultural production sales within
the reference period increased from 7.4 percentage points in 2008 to 14.7 percentage
points in 2011.
8,2
18,9
-0,4
20,5
22,9
-10,7
12,7
11,5
-20
-10
0
10
20
30
2008 2009 2010 2011
Milk Agricultural output

Fig. 2.21. Profitability (without subsidies) of milk and total agricultural output
in agricultural companies and enterprises in 20082011, per cent
Sources: Official statistical forms of agricultural companies and other agricultural enterprises 20082011.

Fluctuations in milk purchase prices had the major impact on the profitability of
milk production in 20082011. In 2009 after the apparent drop in the purchase price the
milk production has become unprofitable. The average cost price of sold milk production
in agricultural companies and enterprises in 2008 was 727 LTL/t, if calculated by
reckonable weight, and in 2011 increased to 743 LTL/t, i.e. by 2.2%. The cost price of
natural milk in 2011, compared to 2008, due to the changed milk composition indicators,
increased somewhat more by 2.8%.

79
The activities of the four major groups of Lithuanian milk processing enterprises,
enrolled in the lists of the Vilnius Stock Exchange, only in 2008 suffered 1.9% of losses
(Table 2.24). From 2009 to 2012 profit has been gained again. In 2012 the profitability
reached 3.9%.

Table 2.24. Net profitability of major dairy enterprises in 20082012, per cent
Indicator 2008 2009 2010 2011 2012
Net profitability 1,9 2,6 4,0 3,1 3,9
Source: NASDAQ OMX [interactive], [reviewed on 4 April 2013].Access through Internet:
<http://www.nasdaqomxbaltic.com/market/?pg=reports>

In 2008 the loss rate of Lithuanian milk processing enterprises exporting more
than a half of their products was conditioned by the discontinued export refund
payments and the fall of the global milk product prices. In 2009 export refund payments
were resumed again, and in 20102011 the rise in profitability was influenced by the
increased global prices for dairy products.

3. 3. Meat

The livestock-breeding sector in Lithuania is an important and priority branch of
agriculture. The favourable natural conditions, established cattle-breeding traditions and
the accumulated experience are favourable for the development of this sector in the
country.
Products of animal origin are an important part of the balanced diet. They
contain plenty of nutrients, vitamins, and minerals, necessary for human organism. In
2011 the annual per capita consumption of meat and meat products in Lithuania
amounted to 70 kg (EU-27 average 88 kg), i.e. by 7% less compared to the year 2007.
The number of animals has been decreasing with every year, though sourcing their
products remains rather high. Exclusion is the pig-breeding sector, where the national
consumer needs are not satisfied and about LTL 0.5 billion is spent for pork imports.
The livestock-breeding sector is also of importance for the food industry. The
technical potential of meat, milk and other processing enterprises give all the opportunities
to use to a maximum the resources of the livestock-breeding sector and create economic
preconditions for the development of this sector.
One of the most important objectives for the 20142020 Lithuanian Rural
Development Programme should be the creation and preservation of the competitive
livestock-breeding farm. It is expedient to develop the livestock-breeding in those areas
where the land is not good for plant-growing.

Livestock-breeding. During the period of 20082012 the number of cattle,
dairy cows, pigs and poultry went on decreasing, whereas that of sheep increased
(Table 2.25). Compared to 2004, the number of pigs and cows got reduced by one
fourth.

80
Table 2.25. Number of livestock and poultry in 20082012 (at the end of the year),
thousand
Kind of animals 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Cattle 770,9 759,4 748,0 752,4 729,2 5,4
of which dairy cows 394,7 374,6 359,8 349,5 331,0 16,1
Pigs 897,1 928,2 929,4 790,3 807,5 10,0
Poultry 9107,5 9308,7 9466,3 8921,2 9085,6 1,8
Sheep 47,5 52,5 58,5 60,4 82,8 74,3
Source: Agriculture in Lithuania 2010. Vilnius: Department of Statistics, 2012. ISSN-2029-3658.

Cattle. According to the data of the AIRBC, as at 1 J anuary 2013, cattle was
raised in 80.7 thousand farms, i.e. almost by half less than five years ago (Table 2.26).
The number of small-scale farms with up to 30 head of cattle is on the decrease. The
average size of a farm is still very small. On the average, 8.5 head of cattle were raised per
farm (EU about 37).

Table 2.26. Farms by number of cattle in 2007 and 2012 (at the end of the year),
thousand
Number of cattle per
farm, heads
2007 2012
Number
of farms
number
of cattle
number of
farms
number
of cattle
12 85,2 115,4 42,8 59,6
35 29,5 109,0 18,3 68,0
610 12,7 95,0 9,1 68,9
1120 6,7 96,2 5,1 73,5
2130 2,0 49,4 1,8 44,9
3150 1,5 58,9 1,6 61,4
51100 1,0 68,3 1,2 83,4
101150 0,2 28,9 0,4 44,3
151
0,3 150,2 0,4 180,1
Total 139,2 771,3 80,7 684,0
Average 5,5 8,5
Source: Data of Agricultural and Food Market Information System

Dairy cows accounted for 45% of the cattle herd. The largest number consisted of
the Lithuanian Black-and-White (77%) and the Lithuanian Red (22%) cows. Beef and
cross-breed cattle account for 7%.
In Lithuania within the period of 20082012 the number of farms where up to
10 head of cattle are kept decreased by almost a half, whereas the number of farms
raising more than 50 head increased by one third. The average size per farm is 8.5 head
of cattle by 1.5 times higher than at the end of 2007.

81
Cattle production is dependent on the milk production tendencies. The number
of cows is reducing slower than the volumes of beef meat consumption. Since the
number of cattle for slaughter by two times exceeds the amount of meat needed for the
domestic market, an increase in animal supply has a negative influence on the purchase
prices. Export of live animals is an alternative for increasing prices on cattle. Therefore
export of calves continuing for more than a year was also important in 2012. In 2011,
35% of born calves were exported. It is important to note that meat of dairy cattle is not
so much valued as that of meat cattle.
Raising beef cattle is gaining popularity. In 2012, in Lithuania, 23.8 thousand of
cattle breeders raised 103.6 thousand head of cattle, including 66.1 thousand cows and
heifers. Of pedigree cattle most popular are Limousine, Charolais and Aubrac breeds.
Cross-bred cattle breeds, however, are most numerous. On the average, five heads of
cattle were bred per farm engaged in beef cattle-breeding.

Pigs. According to the data of the Department of Statistics, by the end of 2012 in
Lithuania 807.5 thousand of pigs were raised, of which pedigree breeding pigs
accounted for 63.5 thousand (Table 2.27). In 2012 pig breeders raised about 1.2 million
of pigs, of which number 270 thousand were exported and 915 thousand were
slaughtered. Within the period of 20082012, the number of pigs decreased by 12.5%.
Pig-breeding is an important branch of agriculture, since pork consumption in the
country is highest. However, the pig-breeding decline that has started since 1993 is
continuing this is one of few agricultural sectors, not being able to provide pork
supplies to the population. To satisfy the needs, the pork production volumes should be
increased by more than twice. The major pig breeders are agricultural companies and
enterprises in Panevys, Kelm, Jurbarkas and Radvilikis districts.

Table 2.27. Number of pigs by group in 2007 and 2012 (at the end of the year),
thousand
Group of pigs 2007 2012
Change 2012,
compared to 2007,
%
Pigs, total 923,2 807,5 12,5
piglets up to 20 kg 191,5 140,4 26,7
piglets 2050 kg 205,3 220,7 7,5
fattening pigs 5080 kg 250,6 219,0 12,6
fattening pigs 80110 kg 122,1 113,9 6,7
fattening pigs over 110 kg 70,7 49,0 30,7
pedigree sows 81,6 63,5 22,2
boars 1,3 0,9 30,8
Source:Data of Statistics Lithuania..

Sheep and goats. According to the data of the AIRBC, by the end of 2012,
83 thousand of sheep (of which 35.2 thousand of ewes) were raised in 6.1 thousand
farms and 8.2 thousand of goats (of which 3.3 thousand of breeding goats) in 3.5
thousand farms. Over the period of 20082012, the number of sheep increased by 66%,
and that of goats by 20% (Table 2.28). The highest growth in the number of sheep and
goats occurred in 2012. It is presumed that such an increase was encouraged by a new

82
procedure of direct payments for grasslands on infertile soils where animals should be
raised in order to receive those payments.

Table 2.28. Farms by number of sheep and goats in 2007 and 2012
(at the end of the year)
Number of sheep or
goats per farm
Sheep farms Goat farms
2007 2012 2007 2012
farms sheep farms sheep farms goats farms goats
12 1533 2187 1892 2831 2972 3787 2667 3607
35 814 3052 1486 5727 429 1507 648 2305
610 452 3409 1087 8312 75 550 138 996
1120 318 4744 824 12049 11 176 31 436
2130 157 3903 316 7858 1 24 4 90
3150 144 5584 279 10833 2 70 7 267
51100 93 6482 140 9870 1 72 0 0
101150 26 3161 40 4905 0 0 1 122
151 36 17808 49 20948 3 654 2 411
Total 3573 50330 6113 83333 3494 6840 3498 8234
Average 14 14 2 2
Source: Data of Agricultural and Food Market Information System.

During 2012 the number of slaughtered sheep amounted to about 27 thousand,
that of lambs to 8 thousand and goats to 15 thousand. The major number of sheep and
goats are raised by farmers in Anykiai, Moltai, Alytus and Ignalina districts.

Poultry. According to the data of the Department of Statistics, by the end of
2012 the number of poultry raised in Lithuania amounted to 9.1 million (Table 2.29),
most of all hens. Within 5 years the number of turkeys increased twice. The number of
laying hens and geese decreased most of all. Chicken were mostly grown in the poultry
farms of Kaiiadorys, Vilnius and Elektrnai districts. Almost 95% of the total poultry
was raised by the agricultural companies and enterprises.

Table 2.29. Number of poultry in 2007 and 2012, thousand
Poultry 2007 2012
Change2012,
compared to 2007,
%
Hens, total 9692,8 8812,9 9,1
Laying hens 4309,6 3388,2 21,4
Geese 36,9 16,5 55,3
Ducks 34,3 42,5 23,9
Turkeys 104,4 205,9 97,2
Other 6,4 7,8 21,9
Total 9874,8 9085,6 8,0

83

Meat production. By preliminary data, animal and poultry carcass meat
produced in 2012 in all farms amounted to 224.1 thou. t. This corresponds to the level
of the year 2011 (Fig. 2.22).

215,3 198,9
221,2
224,0
224,5
50,2
52,3
49,0
52,4
54,6
85,0
88,0
86,1
70,9
85,3 88,5
81,1
83,9
74,7
74,5
0,6 0,6 0,7 0,8 0,8
0
70
140
210
280
2008 2009 2010 2011 2012*
Meat Beef Pork Poultry meat Sheep meat

* LIAE calculations.
Fig. 2.22. Meat production (carcasses) in 20082012, thousand tonnes

In 2012 the volume of purchased cattle and poultry amounted to 244.2 thou. t
(live weight), accounting for 4.5% more than in 2011.
Slaughterhouses and meat processing enterprises purchased 146.9 thousand of
cattle (by 3% less than in 2011) and produced 37.2 thou. t of carcass meat. The average
purchase price of cattle was by 7.8% higher than in 2011 (Fig. 2.23), as prices went on
increasing in all EU countries because of the increasing prices for fodder.

90,3
77,1 81,3
78,5 79,6
3547
3159
3388
4064
4379
0
50
100
150
200
250
2008 2009 2010 2011 2012
t
h
o
u
.

t
0
1000
2000
3000
4000
5000
L
t
/
t
Amount (live weight), thou. t Purchase price, LTL/t
Fig. 2.23. Amount purchased and average price of cattle in 20082012

84

At the end of the year the purchase price of Class O2 bulls was by 8% lower
than the average price in the EU countries, but higher than in six EU countries.
In 2012 slaughterhouses and meat processing enterprises purchased 47%
(554 thousand) of pigs raised in all farms. In 2012 the average purchase price for pigs
under carcass classification scale SEUROP was by 13% higher than in 2011 (Fig. 2.24).

64,5
61,1
45,7
56,9
55,3
4359
4003
3589
3976
4487
0
40
80
120
160
200
2008 2009 2010 2011 2012
t
h
o
u
.

t
0
1000
2000
3000
4000
5000
6000
L
t
/
t

Fig. 2.24. Amounts purchased and average prices of pigs in 20082012

In 2012 the average purchase price of pigs (606 LTL/100 kg of slaughtered
meat) was by 13.4% higher than in 2011. The highest price increase was fixed in the
second half of the year by 19% higher than a year ago, though from the beginning of
November until the end of the year the purchase price dropped by 10%. An increase in
the purchase price of pigs is related to the increased purchase prices of feed.
In 2012 the average purchase prices for Class E pig carcasses in the EU
countries were by 11.4% higher than in 2011. The highest purchase prices for Class E
pig carcasses were in Malta, Cyprus and Greece, the lowest in the Netherlands,
Ireland, and Denmark. The highest rise in purchase prices was in Cyprus, Poland, and
Sweden. Price tendencies in the EU, Poland, and Lithuania were similar (Fig. 2.25).


85
120
130
140
150
160
170
180
190
200
I II III IV V VIVII VIIIIX X XIXII I II III IV V VIVII VIIIIX X XIXII I II III IV V VIVII VIIIIX X XIXII I II III IV V VIVII VIIIIX X XIXII
2009 2010 2011 2012
Lietuvoje / Lithuania ES / EU Lenkijoje / Poland
Fig. 2.25. Purchase price of pigs in Lithuania, Poland and EU
in 20092012, EUR per 100 kilogram
Source: Data of European Commission.

In 2012, 43.4 million head of poultry were slaughtered (by 7.7% more than in
2011). In 2012, compared to 2011, the average purchase price of poultry meat was by
about 2% higher than in 2011 (Fig. 2.26).

87,7
105,9
88,0
98,2
96,2
3093
2765
2741
3225 3303
0
20
40
60
80
100
120
140
160
180
2008 2009 2010 2011 2012

t
h
o
u
.

t
0
500
1000
1500
2000
2500
3000
3500
4000
L
t
/
t

Fig. 2.26. Amounts purchased and average prices of poultry in 20082012

86

Domestic market. In 2012, 295.7 thou. t of meat and meat products were sold
on the domestic market for LTL 2.2 billion (Table 2.30). If compared to the 2008 pre-
crisis period, market volumes decreased by about 10%, and value by 18%. Within 5
years sales of meat and sub-products on the domestic market increased by one-fourth,
whereas sales of meat products almost decreased. Sales of imported meat on Lithuanias
market did not undergo changes.

Table 2.30. Sales of meat and meat products in the domestic market
in 2008 and 2012
Products
2008 2012
quantity,
thou t
value, LTL
mill.
quantity,
thou t
value, LTL
mill.
Meat and sub-products
95,1 706,2 119,2 879,3
Poultry meat and sub-products
39,7 251,6 54,6 273,3
Meat products
174,8 1553,6 100,7 870,6
Imported meat products
20,0 118,3 21,2 133,7
Total 329,6 2629,7 295,7 2156,9

By LIAE calculations, in 2012 per capita consumption in Lithuania was 72 kg of
meat and meat products (including Category I and II sub-products). As compared to
2011 by 3 kg more (Table 2.31).

Table 2.31. Per capita consumption of meat products in 20082012, kilograms
Meat by kind 2008 2009 2010 2011 2012*
Meat, total 81 72 70 69 72
of which:
beef 6 5 4 4 4
pork 46 42 41 42 43
poultry 24 22 21 21 23
sub-products, category I and II 3 2 3 2 2
* LIAE calculation.

Pork is most popular in our country, however, due to insufficient capacities,
supply of Lithuanian pork is by half lower than demand. Seeking to satisfy the
consumer needs of the population, half of pork is imported. The consumption of beef is
decreasing, since its prices are increasing. Poultry consumption is stable.

87

Foreign trade. In 2012 the balance of Lithuanian foreign trade in meat and
animals was positive (Fig. 2.27). Export volumes increased by 12%, and imports by
13%. Poultry meat exports increased by one-fourth. The major part of exports consists
calves and pigs even 21% of the total exports of meat and animals.

Fig. 2.27. Foreign trade balance of meat and livestock in 20082012, LTL million

In 2012 export of cattle meat amounted to 30 thou. t (Table 2.32). The main
importers: Russia (62%), the EU countries Italy, the Netherlands and Sweden. Pork
was mostly purchased in Russia, Latvia and Belarus, and poultry meat in the EU
countries the Netherlands, Latvia, Estonia, and France.

Table 2.32. Meat* exports by kind in 20082012, thousand tonnes
Meat by kind 2008 2009 2010 2011 2012**
Meat, total 74,0 71,4 87,3
110,0 108,0
of which:
beef 30,9 29,7 31,7 31,1 30,5
pork 13,6 12,9 15,3 23,2 21,0
poultry 19,9 22,4 29,1 35,9 45,0
* Meat products converted into meat.
** LIAE calculation.
Sources: Agriculture in Lithuania 2011. Vilnius: Department of Statistics, 2012. ISSN 2029-3658;
Department of Statistics data.

The main part of meat imports consists of pork (Table 2.33). During 2012
almost 80 thou. t of pork was imported, mostly from Poland, Germany and Belgium. In
2012 two thirds of poultry was imported from Poland.

754,1 763,6
808,1
944,7
1059,4
835,9
704,3
605,4
692,6
781,4
-81,8
59,3
202,7
252,1
278,0
-400
-200
0
200
400
600
800
1000
1200
2008 2009 2010 2011 2012
Export Import Balance

88
Table 2.33. Meat* imports by kind in 20082012, thousand tonnes
Meat by kind 2008 2009 2010 2011 2012**
Meat, total 147,0 133,1 114,5
128,4 122,2
of which:
beef 6,3 2,9 3,4 3,4 2,0
pork 94,5 95,6 78,5 83,2 80,0
poultry 33,2 26,1 21,6 25,2 32,0
* Meat products converted into meat.
** LIAE calculation.
Sources: Agriculture in Lithuania 2011. Vilnius: Department of Statistics, 2012. ISSN 2029-3658;
Department of Statistics data.

The livestock-breeding sector is significant in sourcing food products to
Lithuanian consumers, an important source of exports and supplier of raw materials to
the industry. However, lately those willing to undertake livestock-breeding have been
still less numerous due to the lack of experience in setting up a new livestock-breeding
farm, and what is most important financial support and own funds for acquisition of
an animal herd, farms and technologies. High environmental requirements are finally
frustrating to anyone who wishes to take up this business, since pig-breeding is opposed
to the pollution standards of the chemistry industry.

3. 4. Rape

Application of alternative energy resources is becoming still more important not
only in the EU but also throughout the world. Rape is one of the agricultural crops used
for biofuel manufacturing. The increased purchase prices for rapeseed stimulate the
farmers to cultivate this crop. Almost all rape cultivated in our country is used for
production of biofuel.
In 2012 the global rapeseed harvest did not differ from the previous period
(Table 2.34). The largest portion of rapeseed is cultivated in China, Canada, India, and
the EU countries. The major producers in the EU Germany, France, the United
Kingdom, and Poland. Lithuania is seventh in the EU by the rapeseed harvest.

Table 2.34. World harvest of rapeseed in 20102013, million tonnes
Indicators 20102011 20112012 20122013
World harvest, total 60,55 61,00 60,63
of which:
EU-27 20,75 19,08 18,80
China 13,10 13,43 13,50
Canada 12,79 14,61 13,31
India 7,10 6,20 6,30
Australia 2,36 3,12 3,09

89

In 2012, 18.8 mill. t or 31% of the aggregate global rape yield was harvested in
the EU countries, with a part thereof used for biofuel production. The EU at present has
changed its approach to the biofuel production. It is proposed to restrict and curtail the
production of traditional biofuel from rapeseed and cereal grains from 10% (of the total
fuel used for transport in the country) to 5%. The remaining 5% should consist of
biofuel of second generation manufactured from agricultural and wood waste. Thus it
was aimed to reduce a negative impact of biofuel production on the food product
balance and greenhouse effect, caused by the exhaust gases.

Cultivation. Rape is the long-day plant. The vegetation of winter rape is
130180 days (the total length of vegetation is 270320 days), and spring rape 80110
days. For rape harvest maturity the total sum of 17002300
o
C of active temperatures is
needed. J ust 6070% of the national soils are good for rape cultivation.
During the period of 20082012 rape crop areas increased by 63%, and the yield
was by almost twice more abundant (Table 2.35). In 2000, in Lithuania, rape cultivation
was at a low level just 50 thousand ha, and an impulse, however, was given to the
development of this crop by the emergence of biofuel plants in Lithuania and the
increased need for rapeseed. Within a rather short period the farmers grew the required
amount of this crop for biofuel production.

Table 2.35. Crop area, harvest and yield of rape in 20082012
Indicators 2008 2009 2010 2011 2012
2012, compared to
2008, %
Area, thou. ha 161,6 191,9 251,9 250,2 263,4 63,0
Harvest, thou. t 330,3 415,8 416,7 484,3 632,9 91,6
Yield, t/ha 2,04 2,17 1,65 1,94 2,40 17,6

Since 2009 the crop areas under spring rape has been increasing permanently,
whereas those under winter rape decreased; in 2012, however, the winter rape crop
areas increased to 77.9 thousand ha and of spring rape decreased (Fig. 2.28). This
predetermined the higher yield and harvest of rapeseed.


90
65,7
106,5
89,3
23,4
77,9
95,9
85,4
162,6
226,8
182,
3,00
2,53
1,99
1,80
3,40
1,39
1,71
1,47
1,95
2,01
0
50
100
150
200
250
300
350
400
450
500
550
600
2008 2009 2010 2011 2012
t
h
o
u
.

h
a
Winter rape Spring rape

Fig. 2.28. Area under rape crops and seed yield in 20082012

Market. During the year 2012, in Lithuania, 581.9 thou. t of rapeseed, or nearly
by half more than in 2011, was purchased from rapeseed growers (Table 2.36). In
addition to the increased demand in rapeseed (20%) on the domestic market, its export
was up by almost a half.

Table 2.36. Purchase of rapeseed in 20082012
Indicators 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Amount, thou. t 299,4 368,0 385,9 395,0 581,9 94,4
Price, LTL/t 1269 836 1099 1458 1575 24,1
Value, LTL mill. 379,9 307,7 424,1 575,9 916,5 141,2

In 2012, in Lithuania, the average purchase price for rapeseed (1559 LTL/t)
within 20082012 increased by one-fourth, though in 20092010 it was significantly
lower than in 2012. The average prices in 2011 and 2012 almost did not differ
(Fig. 2.29).


91
1261
1161
1357
1306
1297
1103
1327
1328
1232
1190
111
1048
924
848 847
912
1104
804
843 834
854 85
908
906
917
964
1038
1073
1019
1078
1151
1195
124
1574 1551
1709
1569
1750
1649
1438 1441
1463
1506
145
1483
1506
1530
1566
1560
1603
1557
1606
1498
1568
16
600
800
1000
1200
1400
1600
1800
2000
I II III IV V VI VII VIII IX X X
Months

Fig. 2.29. Average purchase price of rapeseed in 20082012, LTL per tonne

In some Central and East European countries the rapeseed purchase prices in
2012, compared to 2008, also increased greatly (Table 2.37). This shows that tendencies
on the Lithuanian market comply with the European tendencies.

Table 2.37. Average price of rapeseed in selected EU countries in the 45th week of
20082012, LTL per tonne
Countries 2008 2009 2010 2011 2012
Change 2012,
compared to 2008,
%
Lithuania 1032 829 1318 1406 1547 49,9
Germany 1069 853 1368 1456 1586 48,4
Latvia 1225 724 1213 1415 1606 31,1
Estonia 1042 804 1128 1512 1623 55,8
Poland 1155 912 1277 1529 1670 44,6

In 2012, in comparison with 2011, rapeseed export in Lithuania in terms of
value increased twice (Table 2.38). This was conditioned by the growing demand in
rapeseed on the markets of other states. The average price for exported rapeseed due to
its constantly increasing demand for biofuel production and insufficient supply within
20082012 increased by 39%, and in 2012, as compared to 2011, by 9%.


92
Table 2.38. Export of rapeseed in 20082012
Year Amount, thou. t Price, LTL/t Value, LTL mill.
2008 193,2 1201 232,0
2009 297,3 953 283,3
2010 278,5 1138 316,9
2011 219,1 1526 334,3
2012 418,0 1666 696,3

In 2012 the major part of rapeseed was purchased from Lithuania by Germany
28.1%, Belgium 20.9%, Poland 12.4%, and Latvia 11.4%.
Balance of foreign trade in rapeseed is positive. Imports consisted of only
4.4 thou. t. of rapeseed. The major part of imported rape is intended for seed.

Processing. In 2012 Mestilla UAB and Vaizga UAB processed about 300 thou. t
of rapeseed and manufactured 97 thou. t of biodiesel. Within the period of 20082012
the manufacture of this product increased by one fourth. Almost all the fuel
manufactured from rapeseed is exported as Orlen Lietuva AB purchases biofuel from
Latvia and Poland.

97,0
79,9
89,2
64,0
104,0
0
50
100
150
2008 2009 2010 2011 2012
Fig. 2.30. Production of biodiesel in Lithuania in 20082012, thousand tonnes
Source:Information of Ministry of Agriculture.

Rape cultivation is an attractive branch of plant growing its demand excels
supply not only in the major EU countries, but also in the world. Prices are increasing
both on the domestic and foreign markets. Analysis shows that Lithuania has potential
opportunities to increase the areas under rape crops not only in Lithuania, but also to
export some part of rapeseed.

93
SUMMARY
In 2012 the agricultural and food sector accounted for 8.7% of the gross value-
added created in the Lithuanian economy, comprised more than 18% of the total foreign
trade turnover, guaranteed workplaces for nearly one tenth of the employed population.
Aiming to increase the competitiveness of agriculture, to maintain farmers
income, to reduce social disjuncture between rural and urban residents, to protect the
environment, the economic entities are supported from the EU and national budgets. In
2012 the funds for agriculture made up LTL 2,791 million i. e. 2.3% more than in 2011.
In 2012 the export of agricultural and food products totalled LTL 14,632 million
(26.9% more than in 2011), while the import amounted to LTL 11,244 million (17.4%
more). Starting 2004 (when Lithuania joined the EU) the balance of foreign trade of
agricultural and food products was positive. In 2012, as compared to 2011, it increased
by LTL 1,391 million and reached LTL 3,388 million.
In 20082012 the number of agricultural entities by category was changing
unevenly. In 2012, as compared to 2008, the number of registered family farms went up
by 5.3% and, as compared to 2011, increased by 2.4%. With reference to the data of
declarations, over the abovementioned 5-year period the number of agricultural
companies and other enterprises increased by 32.2%, while the number of holdings went
down by 21.3%. The average farm size of agricultural entities that declared UAA in
2012 was 17.5 ha, or by 7.4% larger than in 2011 and by 21.5% more than in 2008.
In 2012 the certified organic area in Lithuania occupied 163 thousand hectares
and was by 3.0% larger than in 2011. The average size of certified farm (including
fishery farms) increased from 60.8 ha (in 2011) to 64.8 ha (in 2012).
The total land area by land category remained almost unchanged. The largest its
proportions made up the area used for agricultural purposes (60.4%) and the area of
forestry land (30.3%).
Recently the most important changes were going in the structure of rural
population employment. In 2008 only 24.3% of rural working population were
employed in agriculture, forestry and fisheries, but due to the economic crisis this share
increased up to 29.9%. already in 2009. Lately, when the economic situation has
improved, the share of population employed in agriculture is going down while the
share of population involved in services is going up. In 2012, 28.2% of the employed
rural population were involved in agriculture, forestry and fisheries.
In 2012, as compared to 2011, the number of SMEs in rural areas increased by
4.2% and reached nearly 10 thousand (of which 78% made up micro-enterprises). Rural
SMEs employed 96 thousand or one fourth of the total number of rural working
population.
Prospects for further development of the agricultural and food sector are
favourable. The growth in world demand for agricultural and food products and higher
prices increase the interest to expand production capacity. Significant investments in
modernisation of farms, raising of labour productivity, optimisation of performance and
food supply to consumers should make the preconditions for an increase in production
amounts.

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